Filed by XOMA Royalty Corporation

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

Subject Company: XOMA Royalty Corporation

File No.: 001-39801

Date: May 26, 2026

Explanatory Note

The following is the Registration Statement on Form S-4 (the “Registration Statement”), which includes the proxy statement of XOMA Royalty Corporation (“XOMA Royalty”) that also constitutes a prospectus of XOMA Royalty Holdings Corporation (“XOMA Holdings”), filed by XOMA Holdings with the Securities and Exchange Commission (the “SEC”) on May 22, 2026 in connection with the proposed merger transactions involving XOMA Royalty, XOMA Holdings, and Ligand Pharmaceuticals Incorporated (“Ligand”). This communication is being filed under XOMA Royalty’s SEC file number for the convenience of XOMA Royalty’s stockholders. Exhibits to the Registration Statement have been omitted from this filing and are filed with the Registration Statement (File No. 333-296211).

Important Information for Investors and Stockholders

This communication may be deemed to be solicitation material in respect of the proposed transactions involving XOMA Royalty, XOMA Holdings, and Ligand. In connection with the proposed transactions, XOMA Holdings has filed with the SEC the Registration Statement, which includes a proxy statement of XOMA Royalty (the “proxy statement/prospectus”). The proxy statement/prospectus will be sent to XOMA Royalty’s stockholders when it becomes available. XOMA Royalty and XOMA Holdings may also file other documents with the SEC regarding the proposed transactions. This document is not a substitute for the proxy statement/prospectus or the Registration Statement or for any other document that XOMA Royalty or XOMA Holdings may file with the SEC.

INVESTORS AND SECURITY HOLDERS OF XOMA ROYALTY ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE THE PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTIONS.

Investors and security holders may obtain free copies of the Registration Statement, the proxy statement/prospectus, and other documents filed by XOMA Royalty and XOMA Holdings with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by XOMA Royalty with the SEC will also be available free of charge on XOMA Royalty’s website at www.xoma.com.

Participants in the Solicitation

XOMA Royalty, XOMA Holdings, Ligand, and certain of their respective directors, executive officers, and other members of management and employees may, under the rules of the SEC, be deemed to be participants in the solicitation of proxies from XOMA Royalty’s stockholders in connection with the proposed transactions. Information about the directors and executive officers of XOMA Royalty, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in the Registration Statement. To the extent the holdings of XOMA Royalty’s securities by XOMA Royalty’s directors and executive officers have changed since the amounts set forth therein, such changes have been or will be reflected on Statements of Change of Ownership on Form 4 filed with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

As filed with the U.S. Securities and Exchange Commission on May 22, 2026

Registration No. 333-     

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

XOMA Royalty Holdings Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Nevada		2834		52-2154066
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

2200 Powell Street, Suite 310

Emeryville, CA 94608

(510) 204-7200

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Owen Hughes

President, Secretary and Treasurer

XOMA Royalty Holdings Corporation

2200 Powell Street, Suite 310

Emeryville, CA 94608

(510) 204-7200

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With a copy to:

 

Ryan A. Murr Branden C. Berns Gibson, Dunn & Crutcher LLP One Embarcadero Center, Suite 2600 San Francisco, CA 94111 (415) 393-8373		Jeffrey Trigilio Chief Financial Officer XOMA Royalty Corporation 2200 Powell Street, Suite 310 Emeryville, CA 94608 (510) 204-7200

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and upon completion of the merger described in the enclosed proxy statement/prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☒
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

XOMA Royalty, HoldCo and XRH Merger Sub, Corp., a Nevada corporation and a wholly owned subsidiary of HoldCo (“HoldCo Merger Sub”) (the “HoldCo Reorganization Merger Agreement”), whereby (i) a direct, wholly owned subsidiary of HoldCo will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty, (ii) each Share issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of common stock of HoldCo, having the same rights, powers and preferences as such Share, (iii) each share of Company Preferred Stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of preferred stock of HoldCo, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as such share of Company Preferred Stock, and (iv) each Company equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to shares of HoldCo common stock on the same terms and conditions.

XOMA Royalty common stock is listed on The Nasdaq Global Market under the symbol “XOMA,” the Series A Preferred Stock is listed on The Nasdaq Global Market under the symbol “XOMAP,” and XOMA Royalty’s depositary shares, each representing a 1/1000^th fractional interest in a share of the Series B Preferred Stock, are listed on the Nasdaq Global Market under the symbol “XOMAO.”

XOMA Royalty will hold a special meeting of its stockholders in connection with the Merger and the Holding Company Reorganization (the “Special Meeting”).

At the Special Meeting, XOMA Royalty stockholders will be asked to consider and vote on (1) a proposal to approve the Merger Agreement (the “Merger Agreement Proposal”), (2) a proposal to approve the Holding Company Reorganization, including the HoldCo Reorganization Merger Agreement (the “Holding Company Reorganization Proposal”), (3) a non-binding, advisory proposal to approve the compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement and the transactions contemplated therein (the “Compensation Proposal”), and (4) a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal. The XOMA Royalty board of directors recommends that XOMA Royalty stockholders vote “FOR” each of the proposals to be considered at the Special Meeting.

The Merger Agreement requires, as a condition to closing of the Merger and the other transactions contemplated by the Merger Agreement, that XOMA Royalty stockholders approve the Merger Agreement Proposal and the Holding Company Reorganization Proposal. Your vote on these matters, as well as other proposals, is very important, regardless of the number of shares you own. Whether or not you plan to attend the Special Meeting electronically, please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by voting online as described in the instructions included with your proxy card.

The accompanying proxy statement/prospectus provides you with important information about the Special Meeting, the Merger, the Holding Company Reorganization, and each of the proposals. We encourage you to read the entire document carefully, in particular the “Risk Factors” section beginning on page 18 of the accompanying proxy statement/prospectus for a discussion of risks relevant to the Merger and the Holding Company Reorganization.

We look forward to the successful completion of the Merger and the Holding Company Reorganization.

 

Sincerely,
		Owen Hughes Chief Executive Officer XOMA Royalty Corporation

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Merger or the Holding Company Reorganization or determined if the accompanying proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated as of, and is first being mailed to the stockholders of XOMA Royalty on or about    , 2026.

 

2200 Powell Street, Suite 310

Emeryville, CA 94608

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF XOMA ROYALTY CORPORATION

TO BE HELD ON    , 2026

To the Stockholders of XOMA Royalty Corporation:

NOTICE IS HEREBY GIVEN that XOMA Royalty Corporation (the “Company” or “XOMA Royalty”) will hold a virtual special meeting of its stockholders (the “Special Meeting”) at the Special Meeting website, at www.    .com/    , on    , 2026, beginning at    , Pacific Time, for the purpose of considering and voting on the following proposals:

(1) to approve the Agreement and Plan of Merger, dated April 27, 2026, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated May 16, 2026 (as it may be amended from time to time), by and among XOMA Royalty, Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Parent”), Flex Merger Sub, Inc., a Nevada corporation and wholly owned subsidiary of Parent (“Merger Sub”) and XOMA Royalty Holdings Corporation, a Nevada corporation and wholly owned subsidiary of XOMA Royalty (“HoldCo”), a copy of which is included as Annex A to the accompanying proxy statement/prospectus (as amended, the “Merger Agreement”), pursuant to which, and upon the terms and subject to the conditions thereof, including without limitation, effecting the Holding Company Reorganization (as defined below) and pursuant to the applicable provisions of the Nevada Revised Statutes (“NRS”), including Chapter 92A thereof, Merger Sub will merge with and into HoldCo (the “Merger”), with HoldCo surviving the Merger as a wholly owned subsidiary of Parent (the “Merger Agreement Proposal”);

(2) to approve an Agreement and Plan of Merger to be entered into by and among XOMA Royalty, HoldCo and XRH Merger Sub, Corp., a Nevada corporation and a wholly owned subsidiary of HoldCo (“HoldCo Merger Sub”) (the “HoldCo Reorganization Merger Agreement”), a copy of which is included as Annex B to the accompanying proxy statement/prospectus (the “HoldCo Reorganization Merger Agreement”), pursuant to which, prior to the Effective time and upon the terms and subject to the conditions thereof, XOMA Royalty will effect a holding company reorganization (the “Holding Company Reorganization”) pursuant to the applicable provisions of the NRS, including Chapter 92A thereof, whereby (i) a direct, wholly owned subsidiary of HoldCo will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty, (ii) each share of XOMA Royalty common stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of common stock of HoldCo, having the same rights, powers and preferences as such share, (iii) each share of XOMA Royalty preferred stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of preferred stock of HoldCo, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as such share of XOMA Royalty preferred stock, and (iv) each Company equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to shares of HoldCo common stock, on the same terms and conditions, pursuant to (the “Holding Company Reorganization Proposal”);

(3) to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement and the transactions contemplated therein (the “Compensation Proposal”); and

(4) to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal (the “Adjournment Proposal”).

XOMA Royalty will transact no other business at the Special Meeting. The accompanying proxy statement/prospectus, including the Merger Agreement attached thereto as Annex A and the HoldCo Reorganization Merger Agreement attached thereto as Annex B, contains further information with respect to these matters.

Only holders of record of XOMA Royalty common stock at the close of business on    , 2026 (the “record date”) are entitled to notice of and to vote at the Special Meeting and at any adjournments or postponements thereof.

The XOMA Royalty board of directors (the “XOMA Royalty Board”) has approved and declared advisable (i) the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger Agreement Proposal, on the terms and subject to the conditions set forth in the Merger Agreement and (ii) the HoldCo Reorganization Merger Agreement, the Holding Company Reorganization and the other transactions contemplated therein, including the Holding Company Reorganization Proposal, on the terms and subject to the conditions set forth in the HoldCo Reorganization Merger Agreement. The XOMA Royalty Board recommends that XOMA Royalty stockholders vote “FOR” the Merger Agreement Proposal, “FOR” the Holding Company Reorganization Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

Your vote is very important, regardless of the number of shares of XOMA Royalty common stock you own. The Merger Agreement requires, as a condition to closing of the Merger and the other transactions contemplated by the Merger Agreement, that XOMA Royalty stockholders approve the Merger Agreement Proposal and the Holding Company Reorganization Proposal. Assuming a quorum is present, the approval of the Merger Agreement Proposal and the Holding Company Reorganization Proposal each require the affirmative vote of the holders of a majority of the outstanding voting power of the XOMA Royalty stockholders at the Special Meeting on the Merger Agreement Proposal and the Holding Company Reorganization Proposal, respectively.

A summary of the dissenter’s rights available to XOMA Royalty stockholders with respect to the Merger Agreement is described in the section of the accompanying proxy statement/prospectus entitled “The Merger Agreement—Dissenting Shares” and NRS 92A.300 through 92A.500, inclusive (the “Nevada Dissenter’s Rights Statutes”), a copy of which is attached to this proxy statement/prospectus as Annex G. Please note that if you wish to preserve your ability to exercise dissenter’s rights if the Merger is effectuated, you must (i) not vote (and not cause or permit your shares to be voted) in favor of the Merger Agreement Proposal, (ii) deliver written notice to XOMA Royalty indicating your intent to assert dissenter’s rights and demand payment for your shares prior to the taking of the vote on the Merger Agreement Proposal at the Special Meeting, and (iii) otherwise comply with the requirements of the Nevada Dissenter’s Rights Statutes. See the section of the accompanying proxy statement/prospectus entitled “The Merger Agreement—Dissenter’s Rights.”

A complete list of XOMA Royalty stockholders as of the record date will be open to the examination of any XOMA Royalty stockholder at XOMA Royalty’s principal executive offices at 2200 Powell Street, Suite 310, Emeryville, California 94608 for a period of 10 days prior to the Special Meeting. This list of stockholders will also be available on the bottom panel of your screen during the meeting after entering the 16-digit control number included on the proxy card that you received, or on the materials provided by your bank or broker.

Whether or not you plan to attend the Special Meeting electronically, XOMA Royalty urges you to please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope, call the toll-free telephone number or vote online as described in the instructions included with the proxy card, so that your shares may be represented and voted at the Special Meeting. To participate electronically in the Special Meeting, you will need the 16-digit control number included on your proxy card or on the voting instruction form that accompanied your proxy materials. The meeting webcast will begin promptly at    , Pacific Time. If

your shares are held in street name through a bank, broker or other nominee, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Internet and telephone voting also may be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares at the Special Meeting, you may visit www.   .com/    and enter the 16-digit control number included in the voting instruction form provided to you by your bank or brokerage firm. If you hold your shares in street name and you do not receive a 16-digit control number, you may need to log in to your bank or brokerage firm’s website and select the stockholder communications mailbox to access the meeting and vote. Instructions should also be provided on the voting instruction form provided by your bank or brokerage firm. If you have any questions about the Merger or the Holding Company Reorganization or how to vote or direct a vote in respect of your shares of XOMA Royalty common stock, you may contact our proxy solicitor, Sodali & Co, at (203) 658-9400 or by email at XOMA@info.sodali.com.

By Order of the Board of Directors of XOMA Royalty Corporation

		Owen Hughes Chief Executive Officer   Emeryville, California     , 2026

 

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about XOMA Royalty Corporation (the “Company” or “XOMA Royalty”) from other documents that XOMA Royalty has filed with the U.S. Securities and Exchange Commission (the “SEC”) and that are contained in or incorporated by reference into this proxy statement/prospectus. For a listing of documents incorporated by reference into this proxy statement/prospectus, please see the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus. This information is available for you free of charge to review through the SEC’s website at www.sec.gov.

Any stockholder may request a copy of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other information concerning XOMA Royalty, without charge, by written request directed to the Company or its proxy solicitor at the following contacts:

XOMA Royalty Corporation

2200 Powell Street, Suite 310

Emeryville, CA 94608

Attention: Secretary

Sodali & Co

430 Park Ave, 14^th Floor

New York, NY 10022

Email: XOMA@info.sodali.com

In order for you to receive timely delivery of the documents in advance of the special meeting of XOMA Royalty stockholders to be held on     , 2026 (the “Special Meeting”), you must request the information no later than seven calendar days prior to the Special Meeting.

The contents of the websites of the SEC, XOMA Royalty or any other entity are not incorporated by reference into this proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference into this proxy statement/prospectus at these websites is being provided only for your convenience.

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by XOMA Royalty Holdings Corporation, a Nevada corporation and wholly owned subsidiary of XOMA Royalty (“HoldCo”), constitutes a prospectus of HoldCo under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock, shares of preferred stock and equity-based awards of HoldCo to be issued to XOMA Royalty common stockholders, preferred stockholders and equity-based award holders, respectively, pursuant to the applicable provisions of the Nevada Revised Statutes (“NRS”), including Chapter 92A thereof (the “Holding Company Reorganization”). This document also constitutes a proxy statement of XOMA Royalty under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). It also constitutes the notice of meeting with respect to the Special Meeting.

You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. XOMA Royalty has not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this proxy statement/prospectus. This proxy statement/prospectus is dated     , 2026, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.

Further, you should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this proxy statement/prospectus to XOMA Royalty stockholders nor the issuance by HoldCo of shares of its common stock, shares of its preferred stock or equity-based awards pursuant to the Holding Company Reorganization will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

TABLE OF CONTENTS

 

		Page
REFERENCES TO ADDITIONAL INFORMATION
ABOUT THIS PROXY STATEMENT/PROSPECTUS
QUESTIONS AND ANSWERS			1
SUMMARY			12
RISK FACTORS			18
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			26
THE PARTIES TO THE MERGER			28
THE SPECIAL MEETING			30
PROPOSAL NO. 1: THE MERGER AGREEMENT PROPOSAL			37
PROPOSAL NO. 2: THE HOLDING COMPANY REORGANIZATION PROPOSAL			38
PROPOSAL NO. 3: THE COMPENSATION PROPOSAL			39
PROPOSAL NO. 4: THE ADJOURNMENT PROPOSAL			40
THE MERGER			41
THE MERGER AGREEMENT			71
CONTINGENT VALUE RIGHTS			92
THE HOLDING COMPANY REORGANIZATION			100
THE ANCILLARY AGREEMENTS			102
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			104
COMPARISON OF STOCKHOLDERS’ RIGHTS			110
LEGAL MATTERS			111
EXPERTS			112
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF XOMA ROYALTY			113
STOCKHOLDER PROPOSALS AND OTHER COMMUNICATIONS			116
HOUSEHOLDING OF PROXY MATERIALS			117
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			118
Annex A: Agreement and Plan of Merger			A-1
Annex B: HoldCo Reorganization Agreement and Plan of Merger*			B-1
Annex C: Form of Stockholder Voting and Support Agreement			C-1
Annex D: Opinion of Leerink Partners			D-1
Annex E: Form of CVR Agreement			E-1
Annex F: Form of Proxy Card*			F-1
Annex G: Nevada Dissenter’s Rights Statutes			G-1

 

*	To be filed by amendment.

QUESTIONS AND ANSWERS

The following are some questions that you, as a stockholder of XOMA Royalty may have regarding the Merger and the Holding Company Reorganization (collectively, the “Transactions”) and the other matters being considered at the Special Meeting, and brief answers to those questions. You are urged to carefully read this proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this proxy statement/prospectus. You may obtain the information incorporated by reference in this proxy statement/prospectus, without charge, by following the instructions under the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus.

 

Q:	Why am I receiving this proxy statement/prospectus?

 

A:

You are receiving this proxy statement/prospectus because Parent has agreed to acquire XOMA Royalty through a merger, whereby, following the Holding Company Reorganization (as described below), Flex Merger Sub, Inc., a wholly owned subsidiary of Parent, will merge with and into HoldCo, with HoldCo surviving the Merger as a wholly owned subsidiary of Parent. The Agreement and Plan of Merger, dated as of April 27, 2026, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of May 16, 2026 (as it may be amended from time to time) (as amended, the “Merger Agreement”), governs the terms of the Merger, and is attached to this proxy statement/prospectus as Annex A.

In order to complete the Merger, among other things, XOMA Royalty stockholders must approve, in accordance with the NRS: (i) the Merger Agreement, including the Merger and the other transactions contemplated by the Merger Agreement (the “Merger Agreement Proposal”) and (ii) the HoldCo Reorganization Merger Agreement, including the Holding Company Reorganization, and the other transactions contemplated by the HoldCo Reorganization Merger Agreement (the “Holding Company Reorganization Proposal”). Approval of the Holding Company Reorganization Proposal is conditioned upon, and will be deemed satisfied only if, the Merger Agreement Proposal is also approved by the requisite vote of the holders of XOMA Royalty common stock.

XOMA Royalty is holding the Special Meeting to obtain approval of the Merger Agreement Proposal and the Holding Company Reorganization Proposal. XOMA Royalty stockholders will also be asked to (i) approve, on a non-binding, advisory basis, the compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement and the transactions contemplated therein (the “Compensation Proposal”) and (ii) approve the proposal to adjourn the Special Meeting to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal (the “Adjournment Proposal”).

Your vote is very important, regardless of the number of shares that you own. The approvals of the Merger Agreement Proposal and the Holding Company Reorganization Proposal are conditions to the obligations of XOMA Royalty to complete the Merger. The approvals of the Compensation Proposal and the Adjournment Proposal are not conditions to the obligations of XOMA Royalty to complete the Merger.

 

Q:	How do I attend the Special Meeting?

 

A:

The meeting will be held virtually on     , 2026 at      Pacific Time via live audio webcast at www.    .com/    . You are entitled to attend the Special Meeting if you were a XOMA Royalty stockholder as of the close of business on     , 2026 (the “record date”), or hold a valid proxy for the meeting. To be admitted to the Special Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. If your shares are held in street name and your voting instruction form indicates that you may vote those shares through

 

1

www.proxyvote.com, then you may access, participate in and vote at the Special Meeting with the 16-digit access code indicated on that voting instruction form. Otherwise, stockholders who hold their shares in street name should contact the bank, broker or other institution where you hold your account well in advance of the meeting (preferably at least five days before the Special Meeting) to obtain a “legal proxy” in order to be able to virtually attend, participate in or vote at the Special Meeting.

We encourage you to access the Special Meeting before it begins. Online check-in will begin at    Pacific Time and you should allow ample time for the check-in procedures. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting, including to vote, ask questions and view the list of registered XOMA Royalty stockholders as of the record date during the meeting. Information on how to vote before and during the Special Meeting is discussed below.

If you choose to vote your shares electronically at the Special Meeting, please follow the instructions in the below section titled “The Special Meeting—Attending the Special Meeting” of this proxy statement/prospectus.

Even if you plan to virtually attend the Special Meeting, XOMA Royalty recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the Special Meeting.

 

Q:	Does my vote matter?

 

A:	Yes, your vote is very important, regardless of the number of shares that you own. The Merger cannot be completed unless XOMA Royalty stockholders approve both the Merger Agreement and the Holding Company Reorganization.

The XOMA Royalty Board recommends that you vote “FOR” the Merger Agreement Proposal, “FOR” the Holding Company Reorganization Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

 

Q:	What will I receive if the Merger is completed?

 

A:

If the Merger is completed, each share of Company common stock issued and outstanding immediately prior to the Effective Time (other than certain shares to be cancelled pursuant to the Merger Agreement and Dissenting Shares) will be automatically converted into the right to receive (i) $39.00 per share in cash, without interest and subject to deduction for any required withholding taxes, plus (ii) one contingent value right (a “CVR”) that is a contractual right to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust to the holder out of distributions, if any, made by XOMA Royalty LLC (as defined below) (clauses (i) and (ii) collectively, the “Merger Consideration”). As referred to in this proxy statement/prospectus, the Effective Time means the date and time when the Articles of Merger effectuating the Merger have been filed with the Nevada Secretary of State, or such later date and time as may be agreed by the Company and Parent and specified in the Articles of Merger.

For more information regarding the Merger Consideration to be received by the Company equityholders if the Merger is completed, see the section titled “The Merger Agreement—Merger Consideration” of this proxy statement/prospectus.

 

Q:	What is the Holding Company Reorganization?

 

A:

In connection with the Merger Agreement and the transactions contemplated therein, XOMA Royalty will effect a holding company reorganization (the “Holding Company Reorganization”) pursuant to the HoldCo Reorganization Merger Agreement and the applicable provisions of the NRS, including Chapter 92A thereof. In the Holding Company Reorganization:

 

•

HoldCo Merger Sub, a newly formed Nevada corporation and direct, wholly owned subsidiary of HoldCo, will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo;

 

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•

Upon the merger of HoldCo Merger Sub into XOMA Royalty, HoldCo will become the public parent of XOMA Royalty;

 

•

Each share of XOMA Royalty common stock issued and outstanding immediately prior to the effective time of the Holding Company Reorganization will be automatically converted into one share of HoldCo common stock having the same rights, powers, and preferences as XOMA Royalty common stock;

 

•

HoldCo’s articles of incorporation and bylaws will be substantively identical to those of XOMA Royalty immediately prior to the Holding Company Reorganization, and HoldCo’s directors will be the same individuals who served as directors of XOMA Royalty immediately prior to the Holding Company Reorganization; and

 

•

Immediately following the Holding Company Reorganization, XOMA Royalty will convert into a Delaware limited liability company (“XOMA Royalty LLC”).

For more information regarding the Holding Company Reorganization, see the section titled “The Holding Company Reorganization” of this proxy statement/prospectus.

 

Q:	What are the CVRs?

 

A:

Each CVR represents a contractual right to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust to the holder out of distributions, if any, made by XOMA Royalty LLC. The CVRs are subject to significant risks and limitations, including that they may have no value, will not be transferable except in limited circumstances and will not be listed or traded. For a complete description of the CVRs, including the CVR Agreement, payment mechanics, transfer restrictions and related risks, see the sections titled “Contingent Value Rights” and “Risk Factors—Risks Related to the CVRs” of this proxy statement/prospectus.

 

Q:	What is the Janssen Litigation?

 

A:

The “Janssen Litigation” refers to the action filed on August 8, 2025, captioned XOMA (US) LLC and XOMA Royalty Corporation v. Janssen Biotech, Inc. and Johnson & Johnson Innovative Medicine, Case No. 2:25-CV-04484-JHS, pending in the United States District Court for the Eastern District of Pennsylvania, and any related claims, counterclaims, demands, proceedings, settlements and rights of recovery arising out of or relating to the same dispute. XOMA Royalty’s claims arise from a series of license agreements among XOMA Royalty, MorphoSys AG (acquired by Novartis in 2024) and Janssen Biotech, Inc. relating to XOMA Royalty’s patented Bacterial Cell Expression Technology (“BCE Technology”). XOMA Royalty alleges that Janssen used XOMA Royalty’s BCE Technology in the discovery, development and ultimate commercialization of the pharmaceutical product Tremfya® (guselkumab) but never sought or obtained a commercial license from XOMA Royalty for such use and has never paid XOMA Royalty any royalties in connection with the sale of Tremfya®. The complaint asserts a breach of contract claim against Janssen and, in the alternative, an unjust enrichment claim. For a complete description of the Janssen Litigation, including current status and post-Closing governance and prosecution arrangements, see the sections titled “Contingent Value Rights—The Janssen Litigation,” “Contingent Value Rights—Governance of the Janssen Litigation” and “Risk Factors—Risks Related to the CVRs” of this proxy statement/prospectus.

 

Q:	How will my Company preferred stock be treated in the Merger?

 

A:

Prior to the Effective Time, each 8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 per share (the “Series A Preferred Stock”) and each 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05 per share (the “Series B Preferred Stock”, together with the Series A Preferred Stock, the “Perpetual Preferred Stock” and collectively with the Series X Preferred Stock, par value $0.05 per share

 

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(the “Series X Preferred Stock”), the “Company Preferred Stock”) will be redeemed in accordance with the terms of the applicable certificate of designation governing such Perpetual Preferred Stock, including payment of all accrued and unpaid dividends thereon through the date of such redemption.

 

Q:	Will equity awards be affected by the Merger?

 

A:	Yes. At the Effective Time:

 

•

Each outstanding option to purchase Company common stock (each a “Company Option”) with an exercise price per share that is less than the Merger Consideration (with the fair market value of a CVR determined as of the Closing Date) (a “Terminating Company Stock Option”) will automatically become fully vested, cancelled and converted into the right to receive (i) an amount in cash (without interest and subject to deduction for any required tax withholding) equal to the product of (a) the excess of the $39.00 per share cash consideration over the exercise price per share under such Terminating Company Stock Option and (b) the number of shares subject to such Terminating Company Stock Option, and (ii) one CVR for each share subject to such Terminating Company Stock Option (all Company Stock Options that do not constitute a Terminating Company Stock Option will be automatically cancelled and no consideration shall be delivered in exchange therefor);

 

•

each outstanding restricted stock unit of the Company (each a “Company RSU”) (including any performance stock unit of the Company (each a “Company PSU”) for which the performance requirement has been achieved) (other than Company RSUs granted to the Company’s non-employee directors on May 21, 2026) (a “Terminating Company RSU”) will automatically become fully vested, cancelled and converted into the right to receive (i) an amount in cash (without interest and subject to deduction for any required tax withholding) equal to the product of (a) the number of shares subject to such Terminating Company RSU and (b) the $39.00 per share cash consideration, and (ii) one CVR for each share subject to such Terminating Company RSU; and

 

•

each outstanding Company PSU for which the performance requirement has not been achieved (a “Converted PSU”) will be automatically converted into a restricted stock unit award covering a number of shares equal to either: (x) for Company PSUs granted on or after March 1, 2026, the excess of (A) the target number of shares subject to the Company PSU over (B) the number of shares subject to the Company PSU for which the performance requirement was achieved prior to the Effective Time, or (y) for Company PSUs granted prior to March 1, 2026, the excess of (A) the number of shares subject to the Company PSU that would have been earned based on the applicable performance achievement levels relative to the $39.00 per share cash consideration over (B) the number of shares subject to the Company PSU for which the performance requirement was achieved prior to the Effective Time. Each Converted PSU will then be automatically cancelled and converted into the right to receive (a) a cash payment (without interest and subject to deduction for any required tax withholding) equal to the $39.00 per share cash consideration multiplied by the number of shares subject to the Converted PSU, and (b) one CVR for each share subject to the Converted PSU. Any portion of a Company PSU that is not a Terminating Company RSU and does not become a Converted PSU (an “Untriggered PSU”) will be automatically cancelled at the Effective Time and the holder will receive one CVR for each share subject to such Untriggered PSU.

This is only a summary of the treatment of XOMA Royalty equity awards. For a complete description, including the treatment of Company Options, Company RSUs, Company PSUs, Untriggered PSUs and Company Warrants, see the section titled “The Merger Agreement—Treatment of Company Equity Awards and Company Warrants” in this proxy statement/prospectus.

 

Q:	What will happen to the XOMA Royalty Employee Stock Purchase Plan?

 

A:	No new offerings will commence under the XOMA Royalty ESPP, no new elections can be made to participate in the current offering under the XOMA Royalty ESPP, and no current participant may increase

 

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his or her rate of payroll contributions under any XOMA Royalty ESPP. The XOMA Royalty ESPP will terminate prior to the Effective Time and any ongoing offering will be shortened to the extent necessary to ensure that purchases under the offering are made at least five business days prior to the Effective Time.

 

Q:	Will Company Warrants be affected by the Merger?

 

A:

At the effective time, each outstanding Company Warrant with an exercise price per share less than the $39.00 per share cash consideration (an “In the Money Company Warrant”) will automatically be deemed exercised on a cashless basis immediately prior to the effective time. The shares issued upon such cashless exercise will be treated as outstanding shares of XOMA Royalty common stock and converted into the right to receive the Merger Consideration. Each outstanding Company Warrant with an exercise price per share equal to or greater than the $39.00 per share cash consideration (an “Out of the Money Company Warrant”) will automatically be deemed exercised and converted into the right to receive one CVR for each share subject to such warrant.

For a more complete description of the treatment of Company Warrants, including the treatment of In the Money Company Warrants and Out of the Money Company Warrants, see the section titled “The Merger Agreement—Treatment of Company Equity Awards and Company Warrants” in this proxy statement/prospectus.

 

Q:	Who is entitled to vote at the Special Meeting?

 

A:

The record date is     , 2026. All holders of record of shares of XOMA Royalty common stock who at the close of business on the record date are entitled to receive notice of, and to vote at, the Special Meeting and any adjournments or postponements thereof. The Special Meeting will be virtual and you may vote your shares in advance of the Special Meeting. See the below section titled “The Special Meeting—Methods of Voting” of this proxy statement/prospectus for instructions on how to vote your shares without attending the Special Meeting.

 

Q:	What is a proxy?

 

A:	A stockholder’s legal designation of another person to vote such stockholder’s shares of common stock at a Special Meeting is referred to as a proxy. The document used to designate a proxy to vote your shares of XOMA Royalty common stock is referred to as a proxy card.

 

Q:	How many votes do I have for the Special Meeting?

 

A:

Each XOMA Royalty stockholder is entitled to one vote for each share of XOMA Royalty common stock held of record as of the close of business on the record date on each proposal presented at the Special Meeting. As of the close of business on the record date, there were      outstanding shares of XOMA Royalty common stock.

 

Q:	What is the quorum requirement?

 

A:

A quorum of stockholders is required to hold a valid meeting. The holders of a majority in voting power of the shares of XOMA Royalty common stock issued and entitled to vote thereat, present virtually or represented by proxy (regardless of whether the proxy has authority to vote on any matter) at the commencement of the meeting, shall constitute a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the meeting. Abstentions and broker non-votes, if any, will be counted towards the quorum requirement. If there is no quorum, the chair of the meeting or holders of a majority of the voting power of the shares present at the meeting or represented by proxy and entitled to vote may adjourn the meeting to another date.

 

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Q:	What stockholder vote is required for the approval of each proposal at the Special Meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Special Meeting?

 

A:

Proposal No. 1: Merger Agreement Proposal. The approval of the Merger Agreement Proposal by XOMA Royalty stockholders requires the affirmative vote of the holders of a majority of the outstanding voting power of the XOMA Royalty stockholders; as such, abstentions and broker non-votes, if any, will have the effect of votes against the Merger Agreement Proposal.

Proposal No. 2: Holding Company Reorganization Proposal. The approval of the Holding Company Reorganization Proposal requires the affirmative vote of the holders of a majority of the outstanding voting power of the XOMA Royalty stockholders; as such, abstentions and broker non-votes, if any, will have the effect of votes against the Holding Company Reorganization Proposal.

Proposal No. 3: Compensation Proposal. The approval of the Compensation Proposal requires the affirmative vote of the majority of the votes cast on such proposal; as such, abstentions and broker non-votes, if any, will have no effect on the outcome of the Compensation Proposal.

Proposal No. 4: Adjournment Proposal. The Special Meeting may be adjourned to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal and the Holding Company Reorganization Proposal, with the affirmative vote of the majority of the votes cast on such proposal; as such, abstentions and broker non-votes, if any, will have no effect on the outcome of the Adjournment Proposal.

 

Q:	How does the XOMA Royalty Board recommend that I vote at the Special Meeting?

 

A:	The XOMA Royalty Board recommends that you vote “FOR” the Merger Agreement Proposal, “FOR” the Holding Company Reorganization Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal.

In considering the recommendations of the XOMA Royalty Board, XOMA Royalty stockholders should be aware that XOMA Royalty directors and executive officers have interests in the Merger that are different from, or in addition to, their interests as XOMA Royalty stockholders. These interests may include, among others, accelerated vesting of outstanding equity awards and payment of severance benefits. For a more complete description of these interests, see the information provided in the section titled “The Merger—Interests of XOMA Royalty’s Directors and Executive Officers in the Merger” of this proxy statement/prospectus.

 

Q:	Are there any XOMA Royalty stockholders who have already committed to voting in favor of any of the proposals?

 

A:

Yes. Contemporaneously with the execution of the Merger Agreement, Parent entered into Voting and Support Agreements (the “Support Agreements”) with XOMA Royalty officers, directors and certain funds affiliated with BVF Partners (together with affiliated entities) (“BVF” and together with such officers and directors, the “Supporting Stockholders”) who held, as of the record date, more than   % of the voting shares of XOMA Royalty.

Pursuant to the Support Agreements, each Supporting Stockholder has agreed, among other things, to vote its shares of XOMA Royalty common stock in favor of the adoption of the Merger Agreement and the other transactions contemplated by the Merger Agreement, and in the case of BVF, to promptly following the date of the Merger Agreement convert all of their shares of Series X Preferred Stock to Shares in order to permit them to vote the Shares issuable upon conversion in favor of the Company Stockholder Approval. On May 14, 2026, all outstanding shares of Series X Preferred Stock were converted into Shares in accordance with the terms of the Certificate of Designation of Series X Convertible Preferred Stock.

A copy of the form of Support Agreement is attached as Annex C to this proxy statement/prospectus. For a more complete summary of the Support Agreements, see the section titled “The Ancillary Agreements—Support Agreements” of this proxy statement/prospectus.

 

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Q:	How may I vote my shares?

 

A:	Stockholder of record: shares registered in your name

If you are a XOMA Royalty stockholder of record, you may vote online at the Special Meeting, vote by proxy over the internet, or you may also vote by proxy over the telephone or by completing and returning the proxy card.

To vote using the proxy card, simply complete, sign and date the proxy card, and return it promptly in the envelope provided. If you return your signed proxy card to us before the Special Meeting, your shares will be voted as you direct in the proxy card.

To vote over the telephone, dial toll-free      and follow the recorded instructions. You will be asked to provide the Company number and control number from the proxy card. Your telephone vote must be received by 11:59 p.m. Eastern Time on     , 2026 to be counted (for shares held in a 401(k) Plan, your vote must be received by 11:59 p.m. Eastern Time on     , 2026 to be counted).

To vote through the internet prior to the Special Meeting, you may vote at www.proxyvote.com by following the instructions on the website. You will be asked to provide the Company number and control number from the proxy card. Your internet vote must be received by 11:59 p.m. Eastern Time on     , 2026 to be counted (for shares held in a 401(k) Plan, your vote must be received by 11:59 p.m. Eastern Time on     , 2026 to be counted).

To vote through the internet during the Special Meeting, please follow the instructions at www.    .com. You will need to enter the 16-digit control number included on your proxy card.

Beneficial owner: shares registered in the name of a broker or bank

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received voting instructions from that organization rather than from XOMA Royalty. Simply follow the voting instructions from that organization to ensure that your vote is counted.

Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the meeting and vote at the meeting even if you have already voted by proxy.

Additional information on attending the Special Meeting can be found in the section titled “The Special Meeting” on page 30 of this proxy statement/prospectus.

 

Q:	What if I have technical difficulties or trouble accessing the virtual meeting website?

 

A:	If you encounter any difficulties accessing the virtual Special Meeting webcast during the check-in or meeting time, please call the technical support number that will be posted on the Special Meeting website log-in page.

 

Q:	What if I cannot virtually attend the Special Meeting?

 

A:	You may vote your shares electronically before the meeting by internet, by proxy card or voting instruction form, or by telephone as described above. You do not need to access the Special Meeting webcast to vote if you submitted your vote in advance of the Special Meeting.

Additional information on voting procedures can be found under the section titled “The Special Meeting” on page 30 of this proxy statement/prospectus.

 

Q:	What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name?”

 

A:	If your shares of XOMA Royalty common stock are registered directly in your name with Equiniti Trust Company, LLC, XOMA Royalty’s transfer agent, you are considered the stockholder of record with respect

 

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to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy for your vote, directly to XOMA Royalty or to a third party to vote, at the Special Meeting.

If your shares of XOMA Royalty common stock are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the stockholder of record with respect to those shares. Your bank, broker or other nominee will provide you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend the Special Meeting. If your shares are not registered in your own name and you would like to vote your shares at the Special Meeting, you may visit www.    .com/     and enter the 16-digit control number included in the voting instruction form provided to you by your bank or brokerage firm. If you hold your shares in street name and you do not receive a 16-digit control number, you may need to log in to your bank or brokerage firm’s website and select the stockholder communications mailbox to access the meeting and vote. Instructions should also be provided on the voting instruction form provided by your bank or brokerage firm.

 

Q:	What does it mean if I receive more than one proxy card or voting instructions?

 

A:

If you receive more than one proxy card or voting instructions, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy card or voting instructions and cast your vote with respect to each proxy card or voting instructions to ensure that all of your shares are voted.

 

Q:	If a stockholder gives a proxy, how are the shares of XOMA Royalty common stock voted?

 

A:

Regardless of the method by which you choose to vote, the individuals named on the enclosed proxy card will vote your shares of XOMA Royalty common stock in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of XOMA Royalty common stock should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the Special Meeting.

 

Q:	What if I sign and return a proxy card or otherwise vote but do not make specific choices?

 

A:	Stockholder of record: shares registered in your name

If you sign and return your proxy card with no further instruction and do not hold your shares beneficially through a broker, bank or other nominee, your shares will be voted in accordance with the XOMA Royalty Board’s recommendations on all proposals.

Beneficial owner: shares registered in the name of a broker or bank

If you are the beneficial owner and do not direct your broker, bank or other agent how to vote your shares, your broker, bank or other agent will only be able to vote your shares with respect to proposals considered to be “routine.” Your broker, bank or other agent is not entitled to vote your shares with respect to “non-routine” proposals, which can result in a “broker non-vote.” Whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. Even with respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your broker, bank or other agent how to vote your shares on all proposals to ensure that your vote is counted.

 

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Q:	Can I revoke my proxy?

 

A:	Stockholder of record: shares registered in your name

Yes. You can revoke your proxy at any time before the closing of the polls at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:

 

•

You may send a timely written notice of such revocation to the Secretary of the Company at the Company’s principal executive office: 2200 Powell Street, Suite 310, Emeryville, California 94608.

 

•

You may attend the Special Meeting and vote online. Simply attending the meeting will not, by itself, revoke your proxy.

 

•

You may submit a properly completed proxy card with a later date.

 

•

You may grant a subsequent proxy by telephone or through the internet.

Your last timely submitted vote is the one that will be counted.

Beneficial owner: shares registered in the name of a broker or bank

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by your broker, bank or other agent with respect to changing your vote.

For more information, see the section titled “The Special Meeting—Revocability of Proxies” of this proxy statement/prospectus.

 

Q:	How can I find out the results of the voting at the Special Meeting?

 

A:	Preliminary voting results will be announced at the Special Meeting. In addition, final voting results will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Special Meeting.

 

Q:	If I do not favor the Merger, what are my rights, including dissenter’s rights under Nevada law?

 

A:

Subject to certain statutory limitations and conditions, XOMA Royalty stockholders are entitled under the NRS to dissent from the Merger and to demand payment for the “fair value” of their shares (as defined in NRS 92A.320) rather than receiving the Merger Consideration, if they properly preserve and exercise such dissenter’s rights under the Nevada Dissenter’s Rights Statutes, a copy of which is attached to this proxy statement/prospectus as Annex G.

Please note that if you wish to preserve your ability to exercise dissenter’s rights if the Merger is effectuated, you must (i) not vote in favor of the Merger Agreement Proposal, (ii) deliver written notice to XOMA Royalty indicating your intent to assert dissenter’s rights and demand payment for your shares prior to the taking of the vote on the Merger Agreement Proposal at the Special Meeting, and (iii) otherwise comply with the requirements of the Nevada Dissenter’s Rights Statutes. For more information, see the section titled “The Merger Agreement—Dissenter’s Rights” of this proxy statement/prospectus.

If they are not in favor of the Merger, XOMA Royalty stockholders may vote against the Merger Agreement Proposal. Information about how XOMA Royalty stockholders may vote on the proposals being considered in connection with the Merger can be found under the section titled “The Special Meeting” of this proxy statement/prospectus.

 

Q:	Are there any risks that I should consider in deciding whether to vote for the approval of the Merger Agreement Proposal and the Holding Company Reorganization Proposal?

 

A:	Yes. You should read and carefully consider the risk factors set forth in the section titled “Risk Factors” of this proxy statement/prospectus. You also should read and carefully consider the risk factors of XOMA

 

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Royalty contained in the documents that are incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus.

 

Q:	Who will solicit and pay the cost of soliciting proxies?

 

A:

XOMA Royalty has engaged Sodali & Co, to assist in the solicitation of proxies for the Special Meeting. XOMA Royalty estimates that it will pay Sodali & Co a fee of approximately $10,000, plus reimbursement of reasonable expenses. XOMA Royalty has agreed to indemnify Sodali & Co against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). XOMA Royalty also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of XOMA Royalty common stock. XOMA Royalty directors, officers and employees also may solicit proxies, by telephone, by mail, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:	What are the U.S. federal income tax consequences of the Merger to XOMA Royalty stockholders?

 

A:

The exchange of Company Shares for cash and CVRs pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. The amount of gain or loss a Holder (as defined below) recognizes, and the timing and character of a portion of such gain or loss, depends in part on the U.S. federal income tax treatment of the CVRs, with respect to which there is a significant amount of uncertainty. For a more complete discussion, see “U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus. Each Holder is urged to consult its tax advisor as to the U.S. federal income tax consequences to it of the Merger.

 

Q:	When is the Merger expected to be completed?

 

A:

Subject to the satisfaction or waiver of the closing conditions described under the section titled “The Merger Agreement—Conditions to the Completion of the Merger” of this proxy statement/prospectus, including the adoption of the Merger Agreement and approval of the Holding Company Reorganization by XOMA Royalty stockholders, the Merger is expected to be completed in the third quarter of 2026. However, XOMA Royalty cannot predict the actual date on which the Merger will be completed, or if the Merger will be completed at all, because completion of the Merger is subject to conditions and factors outside the control of XOMA Royalty.

 

Q:	What are the conditions to the completion of the Merger?

 

A:	The Merger and the CVR Payment (as defined below) are subject to a number of conditions to closing as specified in the Merger Agreement. These closing conditions include, among others:

 

•

the approval by XOMA Royalty stockholders of the Merger Agreement;

 

•

the absence of any adverse law or order enacted, entered, promulgated, enforced or deemed applicable by any governmental entity that enjoins, restrains, prevents or prohibits or makes illegal the consummation of the Merger;

 

•

the expiration or termination of the applicable waiting period (and any extensions thereof) under the HSR Act; and

 

•

the completion of the Holding Company Reorganization.

The obligation of XOMA Royalty to consummate the Merger is also conditioned on, among other things:

 

•

the representations and warranties of the other parties being true and correct as of the date of the Merger Agreement and as of the Closing Date of the Merger, subject to certain materiality exceptions; and

 

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•

the performance in all material respects by the other parties of their obligations under the Merger Agreement that are required to be performed on or prior to the date of the closing of the Merger.

No assurance can be given that the required consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the Merger could cause XOMA Royalty not to realize some or all of the benefits that XOMA Royalty expects to achieve if the Merger is successfully completed within its expected timeframe. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see the sections titled “The Merger Agreement—Conditions to the Completion of the Merger” and “The Merger—Regulatory Approvals; Consents” of this proxy statement/prospectus.

 

Q:	What happens if the Merger is not completed?

 

A:

If the Merger is not completed for any reason, XOMA Royalty stockholders will not receive any Merger Consideration for their shares of XOMA Royalty common stock in connection with the Merger. Instead, XOMA Royalty will remain an independent public company and XOMA Royalty common stock will continue to be traded on The Nasdaq Global Market. If the Merger Agreement is terminated under certain specified circumstances, XOMA Royalty will be required to pay a termination fee of $40.0 million. See the section titled “The Merger Agreement—Termination Fee” of this proxy statement/prospectus for a more detailed discussion of the termination fees.

 

Q:	How will I receive the HoldCo common stock and preferred stock to which I am entitled in the Holding Company Reorganization?

 

A:

Because the Holding Company Reorganization will immediately be followed by the Merger, your HoldCo common stock and preferred stock will immediately convert into the right to receive the Merger Consideration. No shares of HoldCo common stock or preferred stock are expected to be delivered to stockholders after the Holding Company Reorganization.

 

Q:	What should I do now?

 

A:

You should read this proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope(s) or submit your voting instructions over the Internet, or by telephone, as soon as possible so that your shares will be voted in accordance with your instructions.

 

Q:	How can I find more information about XOMA Royalty?

 

A:	You can find more information about XOMA Royalty by reading this proxy statement/prospectus and from various sources described under “Where You Can Find More Information; Incorporation of Certain Information by Reference.”

 

Q:	Whom do I call if I have questions about the Special Meeting or the Merger?

 

A:	If you have questions about the Special Meeting, or the Merger, or desire additional copies of this proxy statement/prospectus or additional proxies, you may contact:

Sodali & Co

430 Park Ave, 14th Floor

New York, NY 10022

Email: XOMA@info.sodali.com

 

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RISK FACTORS

In deciding whether to vote for the adoption of the Merger Agreement, the Holding Company Reorganization or the Compensation Proposal, you are urged to carefully consider all of the information included or incorporated by reference in this proxy statement/prospectus, which is listed in the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus. You should also read and consider the risks associated with the businesses of XOMA Royalty. The risks associated with the business of XOMA Royalty can be found in XOMA Royalty’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as such risks may be updated or supplemented in XOMA Royalty’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof), each of which are incorporated by reference into this proxy statement/prospectus. In addition, you are urged to carefully consider the following material risks relating to the Merger, the Holding Company Reorganization and the business of XOMA Royalty.

Risks Related to the Merger

If the Merger is consummated, XOMA Royalty stockholders will forego all future appreciation in XOMA Royalty’s business and will receive only 75% of the economic benefit of any recovery from the Janssen Litigation.

If the Merger is consummated, XOMA Royalty stockholders will receive the Merger Consideration, consisting of $39.00 in cash plus one CVR per share, and will cease to have any equity interest in XOMA Royalty or its business. The $39.00 cash component is fixed and will not be adjusted for any increase in the value of XOMA Royalty common stock, any improvement in XOMA Royalty’s business, assets, prospects, financial condition or operating results, or any favorable developments in the milestone and royalty portfolio, in each case occurring between the date of the Merger Agreement and the closing of the Merger or thereafter. Stockholders will not participate in any value that XOMA Royalty might have generated had it remained an independent public company, including value attributable to future acquisitions of royalty and milestone rights, organic growth in the existing portfolio, or any re-rating of XOMA Royalty common stock by the market.

In addition, although the CVRs are designed to deliver to former XOMA Royalty stockholders the economic benefit of any recovery from the Janssen Litigation (indirectly through the CVR Trust and XOMA Royalty LLC), holders of CVRs will receive only a portion of the economic benefit of that recovery. The amount, if any, received per CVR may be materially less than the per-share economic value that XOMA Royalty stockholders would have realized had XOMA Royalty pursued the Janssen Litigation as an independent public company and distributed the entire net proceeds to its stockholders.

The CVRs are also subject to the additional limitations, risks and contingencies described under “—Risks Related to the CVRs” below, including that the Janssen Litigation may result in no recovery at all, that any recovery may be substantially reduced by litigation costs, taxes and other expenses, and that the timing of any payment on the CVRs is uncertain and may be significantly delayed.

There can be no assurance that the aggregate value of the Merger Consideration, including any amounts ultimately paid on the CVRs, will equal or exceed the value that XOMA Royalty stockholders would have realized had XOMA Royalty remained an independent public company.

The completion of the Merger is subject to certain conditions, including stockholder and regulatory approvals as well as other uncertainties, and there can be no assurances as to whether and when they may be completed.

Completion of the Merger is subject to various closing conditions, including, among other things, the receipt of applicable stockholder and regulatory approvals. Further, if the Merger has not been consummated on or before the Termination Date (as defined in the Merger Agreement), then the Merger Agreement may be

 

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terminated by either party. There is no assurance that receipt of applicable stockholder and regulatory approvals will occur, or that all of the other closing conditions will be satisfied (or waived, to the extent permitted by applicable law), or that the Merger will be completed on the terms reflected in the Merger Agreement, within the expected timeframe or at all.

The governmental authorities from which authorizations under the HSR Act are required have broad discretion in administering the governing laws and regulations, and may take into account various facts and circumstances in their consideration of the Merger, including other potential transactions in our industry or other industries. These governmental authorities may initiate proceedings seeking to prevent, or otherwise seek to prevent, the Merger. As a condition to authorization of the Merger or related transactions, these governmental authorities also may seek to impose requirements, limitations or costs, require divestitures or place restrictions on the conduct of the surviving corporation’s business after completion of the Merger.

XOMA Royalty can provide no assurance that all required approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable) in a timely manner or at all, and, if all required consents and approvals are obtained and all closing conditions are timely satisfied (or waived, if applicable), XOMA Royalty can provide no assurance as to the terms, conditions and timing of such consents and approvals or the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within XOMA Royalty’s control, and XOMA Royalty cannot predict when or if these conditions will be satisfied (or waived, if applicable). Any delay in completing the Merger could cause XOMA Royalty not to realize some or all of the benefits that XOMA Royalty expects to achieve if the Merger is successfully completed within its expected timeframe. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see the section titled “The Merger Agreement—Conditions to the Completion of the Merger” of this proxy statement/prospectus.

Failure to complete the Merger could negatively impact XOMA Royalty’s stock price and future business and financial results.

If the Merger is not completed for any reason, XOMA Royalty will remain an independent public company. XOMA Royalty’s ongoing business may be materially and adversely affected and XOMA Royalty would be subject to a number of risks, including the following:

 

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XOMA Royalty may experience negative reactions from the financial markets, including negative impacts on trading prices of XOMA Royalty’s common stock, and from XOMA Royalty’s milestone and royalty partners, licensees, suppliers, stockholders and employees;

 

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certain executive officers or directors of XOMA Royalty may seek other employment opportunities, and the departure of any of XOMA Royalty’s executive officers and the possibility that XOMA Royalty would be unable to recruit and hire an executive could impact negatively XOMA Royalty’s business and operating results;

 

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XOMA Royalty would not realize any of the anticipated benefits of having completed the Merger;

 

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XOMA Royalty may be required to pay Parent a termination fee of $40.0 million if the Merger Agreement is terminated under specified circumstances, including if (i) the Merger Agreement is terminated because stockholder approval is not obtained or the transaction has not closed by the Termination Date, in each case after an acquisition proposal has been made or publicly disclosed and not publicly withdrawn, and within 12 months thereafter XOMA Royalty enters into or consummates a qualifying acquisition proposal, (ii) XOMA Royalty terminates the Merger Agreement to enter into a superior proposal, or (iii) Parent terminates the Merger Agreement following an Adverse Recommendation Change (as defined in the Merger Agreement); and

 

•

matters relating to the Merger (including integration planning) will require substantial commitments of time and resources by XOMA Royalty’s management and the expenditure of significant funds, which

 

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would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to XOMA Royalty as an independent company.

Even if successfully completed, there are certain risks to XOMA Royalty’s stockholders from the consummation of the Merger, including: the amount of cash to be paid per share of XOMA Royalty’s common stock under the Merger Agreement is fixed and will not be adjusted for changes in XOMA Royalty’s business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, XOMA Royalty’s common stock; receipt of the Merger Consideration is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and if the Merger is completed, XOMA Royalty’s stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

XOMA Royalty stockholders might not approve the Merger.

Although XOMA Royalty believes that the Merger is in the best interests of XOMA Royalty and its stockholders, XOMA Royalty may not be able to obtain the requisite stockholder approval for the Merger. Failure to obtain the required stockholder approval may result in the Merger not being completed. In addition, if the Merger Agreement is terminated under certain circumstances, XOMA Royalty may be required to pay Parent a termination fee. See the section titled “The Merger Agreement—Termination of the Merger Agreement” of this proxy statement/prospectus.

While the Merger is pending, XOMA Royalty is subject to business uncertainties and contractual restrictions that could materially adversely affect XOMA Royalty’s operating results, financial position and/or cash flows or result in a loss of employees or milestone and royalty partners, licensees or suppliers.

The Merger Agreement includes restrictions on the conduct of XOMA Royalty’s business until the earlier of the completion of the Merger or termination of the Merger Agreement. For example, unless XOMA Royalty obtains Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), XOMA Royalty may not, subject to certain exceptions and aggregate limitations, incur additional indebtedness, issue additional shares of its common stock, repurchase its common stock, pay dividends (except for dividends on the Perpetual Preferred), acquire assets, securities or property, dispose of businesses or assets, enter into, terminate or amend material contracts or make certain additional capital expenditures. XOMA Royalty may find that these and other contractual restrictions in the Merger Agreement delay or prevent XOMA Royalty from responding, or limit its ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if XOMA Royalty’s management believes they may be advisable. The pendency of the Merger may also divert management’s attention and XOMA Royalty’s resources from ongoing business and operations.

XOMA Royalty’s employees, milestone and royalty partners, licensees or suppliers may experience uncertainties about the effects of the Merger. It is possible that some milestone and royalty partners, licensees, suppliers and other parties with whom XOMA Royalty has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationship with XOMA Royalty as a result of the pending Merger. Similarly, current and prospective employees may experience uncertainty about their future roles with XOMA Royalty following completion of the Merger, which may materially adversely affect XOMA Royalty’s ability to attract and retain key employees. If any of these effects were to occur, it could materially and adversely impact XOMA Royalty’s operating results, financial position and/or cash flows and/or XOMA Royalty’s stock price. See the section titled “The Merger Agreement—XOMA Royalty Conduct of Business” of this proxy statement/prospectus.

 

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XOMA Royalty’s directors and executive officers have interests in the proposed transaction that may be different from, or in addition to, the interests of XOMA Royalty’s stockholders generally.

XOMA Royalty’s directors and executive officers have interests in the proposed transaction that may be different from, or in addition to, the interests of XOMA Royalty’s stockholders generally. The interests of XOMA Royalty’s directors and executive officers include, among others, severance rights, vesting acceleration for equity awards, and rights to continuing indemnification and directors’ and officers’ liability insurance. The XOMA Royalty Board was aware of and carefully considered the interests of XOMA Royalty’s respective directors and officers, among other matters, in evaluating the terms and structure, and overseeing the negotiation of the proposed transaction, in approving the Merger Agreement, the Merger and the other transactions contemplated thereby.

XOMA Royalty stockholders should be aware of these interests when they consider the recommendation of the XOMA Royalty Board that they adopt the Merger Agreement. The interests of XOMA Royalty’s directors and executive officers are described in more detail in the section titled “The Merger—Interests of XOMA Royalty’s Directors and Executive Officers in the Merger” of this proxy statement/prospectus.

XOMA Royalty may waive one or more of the closing conditions without re-soliciting stockholder approval.

To the extent permitted by law, XOMA Royalty may determine to waive, in whole or part, one or more of the conditions to its obligations to consummate the Merger. XOMA Royalty currently expects to evaluate the materiality of any waiver and its effect on XOMA Royalty’s stockholders, as applicable, in light of the facts and circumstances at the time to determine whether any amendment of this proxy statement/prospectus or any re- solicitation of proxies or voting cards is required in light of such waiver. Any determination whether to waive any condition to the Merger or as to re-soliciting stockholder approval or amending this proxy statement/prospectus as a result of a waiver will be made by XOMA Royalty, at the time of such waiver based on the facts and circumstances as they exist at that time.

XOMA Royalty will incur substantial transaction fees and costs in connection with the proposed transaction.

XOMA Royalty has incurred and expects to incur several non-recurring transaction-related costs associated with completing the proposed transaction and achieving desired benefits of the proposed transaction. These fees and costs will be substantial. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, retention, severance, change in control and other costs, filing fees and printing costs. The costs described above and any unanticipated costs and expenses, many of which will be borne by XOMA Royalty even if the proposed transaction is not completed, could have an adverse effect on XOMA Royalty’s financial condition and operating results.

XOMA Royalty stockholders who are entitled to and wish to exercise dissenter’s rights under Nevada law must follow the procedures set forth in the Nevada Dissenter’s Rights Statutes.

Under the Nevada Dissenter’ Rights Statutes, the holders of shares of XOMA Royalty common stock who do not vote in favor of the Merger Agreement Proposal have the right to dissent from the Merger and demand payment of the “fair value” of their shares, as defined in NRS 92A.320 and as determined by a court in a judicial proceeding, rather than receiving the Merger Consideration. Such judicial determination of “fair value” could result in a fair value per share that is greater than, equal to, or less than the $39.00 cash component of the Merger Consideration (excluding any value attributable to the CVRs). The dissenter’s rights process can be lengthy and expensive. In addition, dissenting stockholders will not receive CVRs, and therefore will not participate in any potential recovery from the Janssen Litigation.

Although the Support Agreements include an irrevocable waiver of dissenter’s rights by the stockholders party thereto, other XOMA Royalty stockholders are not bound by such waiver and may exercise dissenter’s rights. Stockholders considering whether to exercise dissenter’s rights should carefully review the requirements of NRS 92A.300 through 92A.500, attached hereto as Annex G, as any failure to strictly comply with these

 

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statutory procedures will result in a loss of dissenter’s rights. See the section titled “The Merger Agreement—Dissenter’s Rights” of this proxy statement/prospectus.

Holders of XOMA Royalty Warrants with exercise prices exceeding the Merger Consideration will receive only CVRs of uncertain value, and the cashless exercise mechanics may result in holders of In the Money Company Warrants receiving fewer shares than expected.

Under the Merger Agreement, each In the Money Company Warrant will automatically be deemed exercised on a cashless basis immediately prior to, and contingent upon, the Effective Time. The number of shares issuable upon such cashless exercise will be determined in accordance with the cashless exercise formula set forth in the applicable warrant. As a result, the number of shares (and thus the Merger Consideration) received by holders of In the Money Company Warrants upon such cashless exercise will be less than the total number of shares subject to such warrants, and the actual value received will depend on the exercise price of the applicable warrant.

Each Out of the Money Company Warrant will be converted solely into the right to receive one CVR per share subject to such warrant. Accordingly, holders of Out of the Money Company Warrants will not receive any cash consideration and will receive only CVRs, the value of which is entirely contingent on the outcome of the Janssen Litigation and may ultimately be zero. See the section titled “Risk Factors—Risks Related to the CVRs” below.

The Merger Agreement contains provisions that limit XOMA Royalty’s ability to pursue alternatives to the proposed transaction, may discourage certain other companies from making a favorable alternative transaction proposal and, in specified circumstances, could require XOMA Royalty to pay Parent a termination fee.

Under the Merger Agreement, XOMA Royalty is subject to certain restrictions on its ability to solicit alternative business combination proposals from third parties, engage in discussion or negotiations with respect to such proposals or provide information in connection with such proposals, subject to certain customary exceptions. XOMA Royalty may terminate the Merger Agreement and enter into an agreement providing for a superior proposal only if specified conditions have been satisfied, and such a termination would result in XOMA Royalty being required to pay Parent a termination fee equal to $40.0 million. If the Merger Agreement is terminated and XOMA Royalty determines to seek another business combination, XOMA Royalty may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the proposed transaction. While XOMA Royalty believes these provisions and agreements are reasonable and customary and are not preclusive of other offers, these provisions could discourage a third party that may have an interest in acquiring all or a significant part of XOMA Royalty from considering or proposing such acquisition, even if such third party were prepared to pay consideration with a higher value than the Merger Consideration. These provisions might also result in a potential third-party acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

The Leerink Partners opinion rendered to the XOMA Royalty Board does not and will not reflect changes in circumstances between the signing of the Merger Agreement and the closing of the Merger.

The XOMA Royalty Board has not obtained an opinion from its financial advisor as of the date of this proxy statement/prospectus since the opinion provided on April 27, 2026, nor does it expect to receive an updated, revised or reaffirmed opinion prior to the completion of the Merger. Changes in the business, operations and prospects of XOMA Royalty, general market and economic conditions and other factors that may be beyond the control of XOMA Royalty, and on which the Leerink Partners opinion was based, may significantly alter the value of XOMA Royalty or the price of XOMA Royalty’s common stock by the time the Merger is completed. The Leerink Partners opinion does not speak as of the time the Merger will be completed or as of any date other

 

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than the date of such opinion. Because Leerink Partners will not be updating the Leerink Partners opinion, such opinion will not address the fairness of the Closing Amount from a financial point of view at the time the Merger is completed. For a description of the opinion that the XOMA Royalty Board received from Leerink Partners, see the section titled “The Merger—Opinion of Leerink Partners, XOMA Royalty’s Lead Financial Advisor.”

If the Merger is not consummated, we may need to raise additional capital to continue our operations and execute our operating plans.

If the Merger is not consummated, XOMA Royalty may need to raise additional capital or XOMA Royalty may need to delay, scale back or eliminate some planned operations, any of which would have a significant negative impact on XOMA Royalty’s prospects and financial condition, as well as the trading price of XOMA Royalty’s common stock. There can be no assurance that XOMA Royalty can raise capital when needed or on terms favorable to XOMA Royalty and its stockholders. Macroeconomic conditions and heightened geopolitical uncertainties may adversely affect general commercial activity and the U.S. and global economies and financial markets, which increases uncertainty around XOMA Royalty’s ability to access the capital markets when needed and on acceptable terms. Moreover, if XOMA Royalty is unable to obtain additional funds on a timely basis, there will be an increased risk of insolvency and up to a total loss of investment by XOMA Royalty’s stockholders.

Lawsuits may be filed against XOMA Royalty and/or Parent challenging the transactions contemplated by the Merger Agreement. An adverse ruling in any such lawsuit may delay or prevent the proposed Merger from being completed.

Lawsuits arising out of or relating to the Merger Agreement and/or the proposed Merger may be filed in the future. One of the conditions to completion of the Merger is the absence of any injunction or other order being in effect that prohibits completion of the Merger. Accordingly, if a plaintiff is successful in obtaining an injunction, then such order may prevent the proposed Merger from being completed, or from being completed within the expected timeframe. In addition, if the Merger is not consummated for any reason, litigation could be filed related to the failure to consummate the Merger.

Regardless of the outcome of any litigation related to the Merger (or the failure of its consummation), such litigation may be time-consuming and expensive, may distract XOMA Royalty’s management from running the day-to-day operations of XOMA Royalty’s business, and may result in negative publicity or an unfavorable impression of XOMA Royalty, any of which could adversely affect the price of XOMA Royalty’s common stock, impair XOMA Royalty’s ability to recruit or retain employees, damage our relationships with XOMA Royalty’s milestone and royalty partners, licensees, suppliers, and other business partners, or otherwise materially harm XOMA Royalty’s operations and financial performance.

Risks Related to the CVRs

The CVRs may have no value, and you may receive no payment in respect of your CVRs.

The Janssen Litigation is the sole source of payments to XOMA Royalty LLC, which in turn is the sole source of distributions to the CVR Trust for payment on the CVRs. If XOMA Royalty LLC does not recover any amounts in connection with the Janssen Litigation, or if the recovery, net of expenses, taxes, third-party litigation funding obligations and reserves, is insufficient to result in any payment to CVR holders, the CVRs will expire with no value, and you will receive no payment in respect of your CVRs. There can be no assurance that any recovery will be obtained in the Janssen Litigation or that, if obtained, any net amounts will be available for distribution to CVR holders.

The Janssen Litigation is at an early stage, and the outcome is highly uncertain.

The Janssen Litigation is at an early stage of the litigation process. The United States District Court for the Eastern District of Pennsylvania denied Janssen’s motion to dismiss the complaint on December 30, 2025. Initial

 

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discovery in the action has commenced; however, the parties have not yet exchanged documents, taken depositions or obtained expert reports, and the action remains at an early stage. Substantial proceedings, including discovery, expert reports, summary judgment motions, trial and any appeals, remain to be conducted.

The outcome of the Janssen Litigation is inherently uncertain. The court’s denial of a motion to dismiss does not mean that XOMA Royalty’s claims will succeed or that XOMA Royalty will recover any amount. Janssen has asserted several defenses that the court did not adjudicate at the motion to dismiss stage, which remain pending and could ultimately defeat XOMA Royalty’s claims in their entirety. Janssen has also disputed XOMA Royalty’s interpretation of the relevant contracts, and the resolution of those disputed contractual interpretations may turn on factual development through discovery, expert testimony and trial. XOMA Royalty may also be unable to prove the amount of damages it claims, even if liability is established.

The Janssen Litigation may take many years to resolve, and payments on the CVRs may be substantially delayed, even if the claims are successful.

Complex commercial litigation of this type typically takes many years to resolve, and may take longer in light of the complexity of the contractual and factual issues, the possibility of interlocutory appeals, and the prospect of post-trial motions and appellate review following any judgment. Even if XOMA Royalty obtains a favorable result at trial, that result may be subject to appeal, which may further delay any recovery. Any settlement may also be conditioned on confidentiality, structured payments or other terms that affect the timing and amount of distributions to CVR holders. CVR holders may not receive any payments in respect of their CVRs for an extended period of time, if at all.

Payments on the CVRs will be net of expenses and may be substantially less than the gross amount recovered.

If XOMA Royalty LLC obtains any recovery in the Janssen Litigation, the amount available for distribution to the CVR Trust for payment to the CVR holders will be reduced by attorneys’ fees and other litigation expenses, any third-party litigation funding obligations, taxes due, reserves for accrued and contingent liabilities, and other fees and expenses. XOMA Royalty LLC may also retain a third-party litigation funder, the terms of which will be determined by the XOMA Royalty LLC board of directors in its sole discretion. Amounts repayable to any third-party litigation funder will be paid out of any recovery before distributions are made to the CVR Trust for payment to the CVR holders. The net amount available for distribution to the CVR Trust for payment to the CVR holders may be substantially less than the gross amount recovered, and may be zero even if a meaningful gross recovery is obtained.

The CVRs are not transferable, will not be listed on any exchange, and there will be no market for the CVRs.

The CVRs are not transferable, except in limited circumstances permitted by the CVR Agreement, including transfers by will or intestacy, by operation of law, and certain transfers without consideration to family members or trusts. As a result, there will be no public or other trading market for the CVRs. CVR holders will have no ability to monetize their CVRs prior to receipt of any payments thereon (if any), and will bear the risk of any reduction in the value of the CVRs without the ability to dispose of their CVRs. The CVRs will not be evidenced by any certificate or other instrument and will not be registered under the Securities Act or any state securities laws.

The CVRs do not represent an equity or ownership interest, and you will have no voting or other rights of an equity holder.

The CVRs are contractual rights only and do not represent any equity, ownership or other interest in XOMA Royalty LLC, the CVR Trust, HoldCo, Parent or any of their respective affiliates. CVR holders will have no voting, dividend or other rights typically associated with equity ownership. CVR holders will have no right to receive financial statements or other reports, no right to inspect books and records, no right to attend meetings,

 

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no right to direct or participate in the management of XOMA Royalty LLC or the CVR Trust, and no right to dividends or distributions other than the contingent payments expressly provided for in the CVR Agreement. No interest will accrue or be payable on any amounts that may become payable in respect of the CVRs.

XOMA Royalty LLC will control the prosecution, settlement and resolution of the Janssen Litigation, and CVR holders will have no consent or other right with respect to those decisions.

XOMA Royalty LLC will have sole and exclusive control over the prosecution, defense, settlement, monetization and resolution of the Janssen Litigation. All decisions regarding the Janssen Litigation, including the engagement and direction of counsel and experts, the conduct of discovery, the assertion or waiver of privileges, settlement strategy, the timing and form of any settlement, and the decision to abandon or release any claims, will be made by the XOMA Royalty LLC board of directors in its sole and exclusive discretion. CVR holders will have no consent, approval, direction, veto or other right with respect to any of these decisions. The XOMA Royalty LLC board of directors may take, or refrain from taking, actions that adversely affect the value of the CVRs, including by settling the Janssen Litigation for an amount less than what could be obtained through continued prosecution, by abandoning claims for strategic or cost reasons, or by establishing reserves that materially reduce the amount available for distribution to the CVR Trust for payment to the CVR holders.

The tax treatment of the CVRs is uncertain, and you may incur tax liability without receiving any corresponding cash distribution.

Because of the highly uncertain potential future payments under the CVR, the U.S. federal income tax consequences of the receipt of CVRs in the Merger and of any payments on the CVRs are uncertain. As described “U.S. Federal Income Tax Consequences of the Merger—Tax Treatment of the Merger, Receipt of the CVRs and Payments on the CVRs,” it is possible that a broker or other intermediary may report payment of the CVRs to a Holder as a “closed transaction” for U.S. federal income tax purposes, in which case such Holder would recognize gain or loss with respect to the CVRs in the year of the Merger, notwithstanding that no cash payment has been received. Moreover, a CVR holder will be treated for U.S. federal and applicable state and local income tax purposes as the owner of a pro rata share of the CVR Trust’s assets and will be treated as receiving any amounts received by the CVR Trust when those amounts are received by the CVR Trust (and as making any payments of expenses when the CVR Trust makes those payments). Accordingly, a CVR Holder may be required to take into account in computing its U.S. federal or other applicable taxable income, a share of items of income, gain, loss, deduction and credit of the CVR Trust and, indirectly, of XOMA Royalty LLC for each taxable year, regardless of whether any cash distribution is made to CVR holders in that year. CVR holders may therefore incur U.S. federal income tax liability without receiving any corresponding cash distribution and may be required to provide tax forms, certifications or other information in connection with tax reporting and withholding. For a more detailed discussion, see the section titled “U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus. Each Holder is urged to consult its tax advisor regarding the U.S. federal, state, local and non-U.S. tax consequences of the receipt, ownership of, and payment with respect to the CVRs.

Risks Relating to XOMA Royalty’s Business

XOMA Royalty’s business will continue to be subject to the risks described in the sections titled “Risk Factors” in XOMA Royalty’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, and in other documents incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus for the location of information incorporated by reference into this proxy statement/prospectus.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This registration statement on Form S-4, of which this proxy statement/prospectus forms a part, and the documents to which XOMA Royalty and HoldCo refer you to in this registration statement, as well as oral statements made or to be made by XOMA Royalty and HoldCo, include certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act, and Section 21E of the Exchange Act. The words “believe,” “continue,” “could,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the control of XOMA Royalty and HoldCo. Statements in or incorporated by reference into this registration statement regarding XOMA Royalty, HoldCo, or the Merger and the Holding Company Reorganization (collectively, the “Transactions”), that are forward-looking, including statements regarding the anticipated benefits of the Merger, the impact of the Merger on XOMA Royalty’s employees, business and future financial and operating results, the ability of the parties to complete the Merger considering the various closing conditions, including the Holding Company Reorganization, and the closing date for the Merger, are based on XOMA Royalty’s management’s estimates, assumptions and projections, and are subject to significant uncertainties and other factors, many of which are beyond XOMA Royalty’s control. These factors and risks include, but are not limited to:

 

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the risk that the Transactions may not be completed in a timely manner or at all, which may adversely affect XOMA Royalty’s business and the price of its securities;

 

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uncertainties as to the timing of the consummation of the Transactions;

 

•

the potential failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction, including stockholder approval by XOMA Royalty stockholders, and the potential failure to satisfy the other conditions to the consummation of the Merger, including potential failure to effect the Holding Company Reorganization;

 

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that the Transactions may involve unexpected costs, liabilities or delays;

 

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the effect of the announcement, pendency or completion of the Merger on XOMA Royalty’s ability to attract, motivate, retain and hire key personnel and maintain relationships with licensees, royalty counterparties and others with whom XOMA Royalty does business, or on XOMA Royalty’s operating results and business generally;

 

•

that the Merger and the Holding Company Reorganization may divert management’s attention from XOMA Royalty’s ongoing business operations;

 

•

the risk of any legal proceedings related to the Transactions or otherwise, or the impact of the Transactions thereupon, including resulting expense or delay;

 

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that XOMA Royalty may be adversely affected by other economic, business and/or competitive factors;

 

•

the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, including in circumstances which would require XOMA Royalty to pay a termination fee;

 

•

the risk that restrictions during the pendency of the Merger may impact XOMA Royalty’s ability to pursue certain business opportunities or strategic transactions;

 

•

the risk that XOMA Royalty may be unable to obtain governmental and regulatory approvals required for the Transactions, or that required governmental and regulatory approvals may delay the consummation of the Transactions or result in the imposition of conditions that could reduce the anticipated benefits from the Merger or cause XOMA Royalty or Parent to abandon the Merger;

 

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•

the risk that the anticipated benefits of the Merger may otherwise not be fully realized or may take longer to realize than expected;

 

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the impact of legislative, regulatory, economic, competitive and technological changes;

 

•

the effect of the announcement, pendency or completion of the Merger on the market price of XOMA Royalty common stock;

 

•

the unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities;

 

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risks that costs and charges associated with the Transactions may be greater than anticipated or incurred in different periods than anticipated;

 

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the risk that the Holding Company Reorganization may negatively impact XOMA Royalty’s business operations and reputation with or ability to serve counterparties, may take longer to realize than expected or may result in the liquidation or dissolution of XOMA Royalty if the Merger is not completed;

 

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the risk that the CVRs may have little or no value and risks relating to the Janssen Litigation; and

 

•

the risk that the Janssen Litigation may not result in a favorable outcome, may take longer to resolve than expected, or may result in recoveries that are substantially less than anticipated, and that litigation costs may materially reduce the amounts available to CVR holders.

In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainty associated with financial or other projections; XOMA Royalty’s ability to obtain the approval of the proposed transaction by its stockholders and the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all and the failure of the proposed transaction to close for any other reason; the risk that a consent or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the proposed transaction, the response of business partners and retention as a result of the announcement and pendency of the proposed transaction; and the diversion of management time in connection with the proposed transaction.

For further discussion of these and other risks, contingencies and uncertainties applicable to XOMA Royalty and HoldCo, see the section titled “Risk Factors” of this proxy statement/prospectus and in XOMA Royalty’s other filings with the SEC incorporated by reference into this proxy statement/prospectus. See also the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus for more information about the SEC filings incorporated by reference into this proxy statement/prospectus.

All subsequent written or oral forward-looking statements attributable to XOMA Royalty and HoldCo or any person acting on its or their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. The forward-looking statements included in this proxy statement/prospectus are made only as of the date of this proxy statement/prospectus. Neither XOMA Royalty nor HoldCo is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as may be required by law.

 

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THE PARTIES TO THE MERGER

XOMA Royalty Corporation

2200 Powell Street, Suite 310

Emeryville, California 94608

(510) 204-7200

XOMA Royalty is a royalty aggregator that plays a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA Royalty does this by providing capital in exchange for the economic rights to future milestone and royalty payments associated with clinical candidates and approved products. In return the drug developer or marketer receives non-dilutive, non-recourse funding. XOMA Royalty seeks to generate stockholder value by maintaining a diversified portfolio to mitigate single-asset, binary risk and by operating under a capital efficient and low corporate cost structure.

XOMA Royalty has a sizable portfolio of economic rights to future potential milestone and royalty payments associated with over 120 commercial products and pre-commercial therapeutic candidates. In 2017, XOMA Royalty transformed its business model to become a royalty aggregator. XOMA Royalty subsequently advanced its portfolio by building upon XOMA Royalty’s existing out-licensing agreements for proprietary products and platforms through the acquisition of rights to future milestones, royalties and commercial payments. Currently, XOMA Royalty’s portfolio is anchored by royalty streams and milestone payments derived from seven commercial-stage assets. In 2025, XOMA Royalty received $33.6 million in commercial payments and $16.9 million from milestone payments and other fees, for total cash receipts of $50.5 million.

XOMA Royalty common stock is listed on The Nasdaq Global Market under the ticker symbol “XOMA.”

For more information about XOMA Royalty, please visit XOMA Royalty’s website at www.xoma.com. The information contained on XOMA Royalty’s website or accessible through it (other than the documents specifically incorporated by reference herein) does not constitute a part of this proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about XOMA Royalty is included in the documents incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus.

XOMA Royalty Holdings Corporation

2200 Powell Street, Suite 310

Emeryville, California 94608

(510) 204-7200

HoldCo, a newly formed, direct, wholly owned subsidiary of XOMA Royalty, is a Nevada corporation that was formed on May 15, 2026, for the sole purpose of effecting the Holding Company Reorganization and the Merger. HoldCo has not conducted any activities other than those incidental to its formation and the matters contemplated by the Holding Company Reorganization and the Merger. Pursuant to the Holding Company Reorganization, a direct, wholly owned subsidiary of HoldCo will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty. Under the Merger Agreement, Merger Sub will merge with and into HoldCo as of the Effective Time, and HoldCo will continue as the surviving corporation and a wholly owned subsidiary of Parent.

 

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Ligand Pharmaceuticals Incorporated

555 Heritage Drive, Suite 200

Jupiter, Florida 33458

(858) 550-7500

Parent is a leading royalty aggregator, partnering with biopharmaceutical companies to finance and advance late-stage clinical development programs. Parent’s primary business is investing in and structuring royalty interests in mid- to late-stage development and commercial biopharmaceutical products, allowing it to generate long-duration, non-dilutive cash flows supported by a lean corporate cost structure. Capital deployment and technology licensing are the primary drivers of its long-term growth.

Parent owns and manages one of the largest and most diversified portfolios of biopharmaceutical royalties in the industry, with economic interests in more than 100 development and commercial-stage assets. Parent funds high-value programs in exchange for long-term economic interests, aligning capital with clinical and commercial success. Parent’s royalty portfolio is designed to deliver consistent and predictable revenue streams across a broad range of therapeutic assets. Parent also licenses its proprietary technologies, Captisol^® and NITRICIL^™, to support drug development and formulation across its global partner network.

Flex Merger Sub, Inc.

555 Heritage Drive, Suite 200

Jupiter, Florida 33458

(858) 550-7500

Merger Sub, a newly formed, direct, wholly owned subsidiary of Parent, is a Nevada corporation that was formed on April 20, 2026, for the sole purpose of effecting the Merger. Merger Sub has not conducted any activities other than those incidental to its formation and the matters contemplated by the Merger Agreement. Under the Merger Agreement, Merger Sub will merge with and into HoldCo as of the Effective Time, and HoldCo will continue as the surviving corporation and a wholly owned subsidiary of Parent.

 

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THE SPECIAL MEETING

This proxy statement/prospectus is being mailed on or about    , 2026 to holders of record of XOMA Royalty common stock as of the close of business on    , 2026 and constitutes notice of the Special Meeting in conformity with the requirements of the NRS and the bylaws of XOMA Royalty (the “XOMA Royalty Bylaws”).

This proxy statement/prospectus is being provided to XOMA Royalty stockholders as part of a solicitation of proxies by the XOMA Royalty Board for use at the Special Meeting and at any adjournments or postponements of the Special Meeting. XOMA Royalty stockholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this document, for more detailed information regarding the Merger Agreement and the transactions contemplated by the Merger Agreement.

Date, Time and Place of the Special Meeting

The Special Meeting is scheduled to be held virtually at the Special Meeting website, www.   .com/   , on    , 2026, beginning at    , Pacific Time, unless adjourned or postponed to a later date and/or time.

Matters to be Considered at the Special Meeting

The purposes of the Special Meeting are as follows, each as further described in this proxy statement/prospectus:

 

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Proposal No. 1: Merger Agreement Proposal. To consider and vote on the Merger Agreement Proposal;

 

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Proposal No. 2: Holding Company Reorganization Proposal. To consider and vote on the Holding Company Reorganization Proposal;

 

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Proposal No. 3: Compensation Proposal. To consider and vote on the Compensation Proposal; and

 

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Proposal No. 4: Adjournment Proposal. To consider and vote on the Adjournment Proposal.

Recommendation of the XOMA Royalty Board of Directors

The XOMA Royalty Board recommends that XOMA Royalty stockholders vote:

 

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Proposal No. 1: “FOR” the Merger Agreement Proposal;

 

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Proposal No. 2: “FOR” the Holding Company Reorganization Proposal;

 

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Proposal No. 3: “FOR” the Compensation Proposal; and

 

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Proposal No. 4: “FOR” the Adjournment Proposal.

After careful consideration, the XOMA Royalty Board (1) adopted and approved the Merger Agreement and the consummation of the transactions upon the terms and conditions set forth in the Merger Agreement, (2) determined that it is in the best interests of XOMA Royalty and its stockholders to enter into the Merger Agreement and to consummate the transactions contemplated thereby, including the Merger, (3) directed that the Merger Agreement Proposal and the Holding Company Reorganization Proposal be submitted to the stockholders of XOMA Royalty for adoption, (4) recommended that the stockholders of XOMA Royalty approve the Merger Agreement Proposal and the Holding Company Reorganization Proposal and (5) declared that the Merger Agreement Proposal and the Holding Company Reorganization Proposal are advisable.

 

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See also the section titled “The Merger—Recommendation of the XOMA Royalty Board of Directors; XOMA Royalty’s Reasons for the Merger” of this proxy statement/prospectus.

Record Date for the Special Meeting and Voting Rights

The record date for the determination of stockholders entitled to receive notice of and to vote at the Special Meeting and any adjournments or postponements thereof is    , 2026. As of the close of business on the record date, there were    shares of XOMA Royalty common stock issued and outstanding. Each XOMA Royalty stockholder will have one vote for each share of XOMA Royalty common stock such holder held at the close of business on the record date on each matter properly brought before the Special Meeting. Only XOMA Royalty stockholders of record at the close of business on the record date are entitled to receive notice of and to vote at the Special Meeting and any adjournments or postponements thereof.

Quorum; Abstentions and Broker Non-Votes

A quorum of stockholders is necessary to conduct the Special Meeting. The holders of a majority in voting power of the shares of XOMA Royalty common stock issued and entitled to vote thereat, present virtually or represented by proxy at the commencement of the meeting, shall constitute a quorum. On the record date, there were    shares of XOMA Royalty common stock outstanding and entitled to vote. Thus, the holders of    shares must be present or represented by proxy at the Special Meeting to establish a quorum. Abstentions and broker non-votes, if any, will be counted for purposes of determining whether a quorum exists. If a quorum is not present, the Special Meeting is expected to be adjourned in accordance with the XOMA Royalty Bylaws until a quorum is met.

If additional votes must be solicited to adopt the Merger Agreement Proposal or the Holding Company Reorganization Proposal, it is expected that the meeting will be adjourned to solicit additional proxies.

Stockholder of record: shares registered in your name

If you sign and return your proxy card with no further instruction and do not hold your shares beneficially through a broker, bank or other nominee, your shares will be voted in accordance with the Board’s recommendations on all proposals.

Beneficial owner: shares registered in the name of a broker or bank

If you are the beneficial owner and do not direct your broker, bank or other agent how to vote your shares, your broker, bank or other agent will only be able to vote your shares with respect to proposals considered to be “routine.” Your broker, bank or other agent is not entitled to vote your shares with respect to “non-routine” proposals, which can result in a “broker non-vote.” Whether a proposal is considered routine or non-routine is subject to stock exchange rules and final determination by the stock exchange. Even with respect to routine matters, some brokers are choosing not to exercise discretionary voting authority. As a result, we urge you to direct your broker, bank or other agent how to vote your shares on all proposals to ensure that your vote is counted.

Required Votes; Vote of XOMA Royalty’s Directors and Executive Officers

 

Proposal				Votes Necessary
Proposal No. 1		Merger Agreement Proposal		Approval requires the affirmative vote of the holders of a majority of the outstanding voting power of the XOMA Royalty stockholders.   Abstentions or broker non-votes, if any, will have the same effect as a vote against the Merger Agreement Proposal.

 

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Proposal				Votes Necessary
Proposal No. 2		Holding Company Reorganization Proposal		Approval requires the affirmative vote of the holders of a majority of the outstanding voting power of the XOMA Royalty stockholders.   Abstentions or broker non-votes, if any, will have the effect as a vote against the Holding Company Reorganization Proposal.
Proposal No. 3		Compensation Proposal		Approval requires the affirmative vote of the majority of the votes cast.   Abstentions or broker non-votes, if any, will have no effect on the outcome of the Compensation Proposal.
Proposal No. 4		Adjournment Proposal		Approval requires the affirmative vote of the majority of the votes cast.   Abstentions or broker non-votes, if any, will have no effect on the outcome of the Adjournment Proposal.

As of the record date, XOMA Royalty directors and executive officers, and their affiliates, as a group, owned and were entitled to vote    shares of XOMA Royalty common stock, or approximately    % of the total outstanding shares of XOMA Royalty common stock as of the record date. The Support Stockholders have entered into Support Agreements obligating them to vote their shares “FOR” the Merger Agreement Proposal, “FOR” the Holding Company Reorganization Proposal, “FOR” the Compensation Proposal and “FOR” the Adjournment Proposal. See also the sections titled “The Ancillary Agreements—Support Agreements” and “Security Ownership of Certain Beneficial Owners and Management of XOMA Royalty” of this proxy statement/prospectus.

Methods of Voting

If you are a stockholder of record as of the record date, you may vote by proxy through the Internet, by telephone, or by mail, or by voting electronically at the Special Meeting. For shares held through a bank, broker or other nominee in “street name” instead of as a registered holder, you may vote by submitting your voting instructions to your bank, broker or other nominee. In most instances, you will be able to do this over the Internet, by telephone or by mail as indicated below. Please refer to the information from your bank, broker or other nominee on how to submit voting instructions.

 

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By Internet: If you are a stockholder of record, you can submit a proxy to vote at www.   .com/    and follow the instructions, 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card or your voting instruction form.

 

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By Telephone: If you are a stockholder of record, you can submit a proxy to vote using a touch-tone telephone by calling    and following the recorded instructions, 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card or your voting instruction form.

 

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By Mail: If you are a stockholder of record, you may complete, sign, date and return by mail the proxy card or voting instruction form sent to you in the envelope provided to you with your proxy materials or voting instruction form.

 

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At the meeting: If you are a stockholder of record, you may vote electronically at the Special Meeting until the closing of the polls by logging into the meeting as a stockholder and clicking the “Vote Here” button. You will need the 16-digit control number included with your proxy materials. For more information on how to attend electronically, see the section titled “—Attending the Special Meeting” of this proxy statement/prospectus.

 

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Record stockholders who attend the Special Meeting may vote their shares live electronically even if they previously have voted their shares.

If you are a stockholder of record, proxies submitted over the Internet, by telephone or by mail as described above should be received by 11:59 p.m., Eastern Time, on    , 2026. To reduce administrative costs and help the environment by conserving natural resources, XOMA Royalty asks that you submit a proxy to vote through the Internet, which is available 24 hours a day.

Notwithstanding the above, if your shares are held in “street name” by a bank, broker or other nominee, you should follow the instructions you receive from your bank, broker or other nominee on how to vote your shares.

No matters other than the proposals listed above will be brought before the Special Meeting and the XOMA Royalty Bylaws provide that the only business that may be conducted at the Special Meeting are those proposals brought before the meeting pursuant to this proxy statement/prospectus.

Shares Held by Parties to the Voting Agreements

Each of the members of the XOMA Royalty Board, XOMA Royalty’s executive officers and certain funds affiliated with BVF Partners (together with affiliated entities), in their capacities as stockholders of XOMA Royalty, entered into voting and support agreements (collectively, the “Support Agreements”), pursuant to which they agreed (i) to vote their shares of XOMA Royalty common stock in favor of the adoption of the Merger Agreement and the other transactions contemplated by the Merger Agreement, and (ii) against (x) any action or agreement that would reasonably be expected to result in a breach of XOMA Royalty’s obligations under the Merger Agreement and (y) any competing acquisition proposal. For further information, please see the section entitled “The Ancillary Agreements—Support Agreements” of this proxy statement/prospectus.

As of the close of business on the record date, there were     shares of XOMA Royalty common stock entitled to vote at the Special Meeting. As of the close of business on the record date, (i) the directors and executive officers of XOMA Royalty beneficially owned and were entitled to vote approximately     shares of XOMA Royalty common stock, representing approximately    % of the shares of XOMA Royalty common stock outstanding on that date and (ii) certain funds affiliated with BVF Partners (together with affiliated entities) that were parties to a Support Agreement beneficially owned and were entitled to vote approximately     shares of XOMA Royalty common stock, representing approximately    % of the shares of XOMA Royalty common stock outstanding on that date.

Revocability of Proxies

Any stockholder giving a proxy has the right to revoke it before the proxy is voted at the Special Meeting by doing any of the following:

 

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delivering a written notice of revocation or a duly executed proxy bearing a later date prior to the Special Meeting, which should be delivered to the Secretary of XOMA Royalty at XOMA Royalty’s principal executive offices, if you voted by mail;

 

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submitting a timely and valid later proxy to vote online at www.   .com/   ;

 

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calling    and following the recorded instructions; or

 

•

attending the Special Meeting and voting electronically. Simply attending the Special Meeting will not, by itself, revoke your proxy.

Execution or revocation of a proxy will not in any way affect the stockholder’s right to attend the Special Meeting and vote live electronically at the Special Meeting.

 

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Written notices of revocation and other communications with respect to the revocation of proxies should be addressed to:

XOMA Royalty Corporation

2200 Powell Street, Suite 310

Emeryville, California 94608

Attn: Secretary

If your shares are held in “street name” and you previously provided voting instructions to your broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee to revoke or change your voting instructions.

Proxy Solicitation Costs

XOMA Royalty is soliciting proxies to provide an opportunity to all XOMA Royalty stockholders to vote on agenda items, whether or not the stockholders are able to attend the Special Meeting or an adjournment or postponement thereof. XOMA Royalty will bear the cost of soliciting proxies from its stockholders. In addition to the solicitation of proxies by mail, XOMA Royalty will ask banks, brokers and other custodians, nominees and fiduciaries to forward the proxy solicitation materials to the beneficial owners of shares of XOMA Royalty common stock held of record by such nominee holders. XOMA Royalty may be required to reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

XOMA Royalty has retained Sodali & Co to assist in the solicitation process. XOMA Royalty estimates that it will pay Sodali & Co a fee of approximately $10,000, plus reimbursement of reasonable expenses. XOMA Royalty also has agreed to indemnify Sodali & Co against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Proxies may be solicited on behalf of XOMA Royalty or by XOMA Royalty directors, officers and other employees by mail, telephone, electronic means (including by facsimile, via the Internet or by other means of electronic communication) or in person. Directors, officers and employees of XOMA Royalty will not be paid any additional amounts for their services or solicitation in this regard.

Attending the Special Meeting

You are entitled to attend the Special Meeting only if you are a stockholder of record of XOMA Royalty at the close of business on    , 2026 (the record date for the Special Meeting) or you hold your shares of XOMA Royalty beneficially in the name of a broker, bank or other nominee as of the record date, or you hold a valid proxy for the Special Meeting.

To participate in the Special Meeting, you will need the 16-digit control number included on your proxy card or on the voting instruction form that accompanied your proxy materials. The meeting webcast will begin promptly at    , Pacific Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at    , Pacific Time, and you should allow ample time for check-in procedures. If you hold your shares through a bank or broker, instructions on how to attend the meeting should also be provided on the voting instruction form provided by your bank or brokerage firm. If you lose your 16-digit control number, you may join the Special Meeting as a “Guest,” but you will not be able to vote, ask questions, or access the list of stockholders as of the record date.

If you plan to attend the Special Meeting and vote electronically, XOMA Royalty still encourages you to submit a proxy to vote in advance by the Internet, by telephone or by mail so that your vote will be counted even if you later decide not to attend the Special Meeting. Submitting your proxy by the Internet, by telephone or by mail will not limit your right to vote at the Special Meeting if you later decide to attend electronically.

 

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Householding

The SEC’s rules permit us to deliver a single set of proxy materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate set of proxy materials, as requested, to any stockholder at the shared address to which a single set of those documents was delivered. If you prefer to receive separate copies of the proxy materials, contact XOMA Royalty’s Secretary at 2200 Powell Street, Suite 310, Emeryville, California 94608, (510) 204-7200.

If you are currently a stockholder sharing an address with another stockholder and wish to receive only one set of future proxy materials for your household, please contact XOMA Royalty’s Secretary at the above address or phone number.

Tabulation of Votes

The XOMA Royalty Board will appoint an independent inspector of election for the Special Meeting. The inspector of election will, among other matters, determine the number of shares of XOMA Royalty common stock represented virtually or by proxy at the Special Meeting to confirm the existence of a quorum, determine the validity of all proxies and votes and certify the results of voting on all proposals submitted to XOMA Royalty stockholders.

Adjournments

If a quorum is present at the Special Meeting but there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal, then XOMA Royalty stockholders may be asked to vote on the Adjournment Proposal.

At any subsequent reconvening of the Special Meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Special Meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting or in the event that a new record date has been fixed for the meeting.

Dissenter’s Rights

Dissenter’s rights are statutory rights under the NRS that, if applicable, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the transaction. Under the NRS, stockholders generally do not have dissenter’s rights if the shares of stock they hold are either listed on a national securities exchange or traded in an organized market and held of record by more than 2,000 holders with a market value of at least $20 million (exclusive of subsidiaries, executives, directors and beneficial stockholders owning more than 10% thereof). Notwithstanding the foregoing, dissenter’s rights are available if stockholders are required by the terms of the merger agreement to accept for their shares anything other than (a) cash, (b) shares of stock or other securities of another entity, including CVRs, that will either be listed on a national securities exchange or traded in an organized market and held of record by more than 2,000 holders with a market value of at least $20 million (exclusive of subsidiaries, executives, directors and beneficial stockholders owning more than 10% thereof) at the time of the merger, or (c) any combination of (a) and (b). Because holders of XOMA Royalty common stock will receive cash and one CVR that is not listed on a national securities exchange or traded in an organized market as part of the merger consideration under the Merger Agreement, they are entitled to dissenter’s rights under the NRS in connection with the Merger Agreement Proposal.

 

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Because XOMA Royalty stockholders are not required by the terms of the Holding Company Reorganization to accept for their shares of XOMA Royalty common stock anything other than shares of HoldCo common stock, holders of XOMA Royalty common stock are not entitled to dissenter’s rights in connection with the Holding Company Reorganization.

Assistance

If you need assistance voting or in completing your proxy card or have questions regarding the Special Meeting or the Merger, please contact Sodali & Co, the proxy solicitor for XOMA Royalty:

Sodali & Co

430 Park Ave, 14^th Floor

New York, NY 10022

Email: XOMA@info.sodali.com

XOMA ROYALTY STOCKHOLDERS SHOULD CAREFULLY READ THIS PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT, THE MERGER AND THE HOLDING COMPANY REORGANIZATION. IN PARTICULAR, XOMA ROYALTY STOCKHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.

 

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PROPOSAL NO. 1: THE MERGER AGREEMENT PROPOSAL

XOMA Royalty stockholders are being asked to consider and vote on a proposal to approve the Merger Agreement (the “Merger Agreement Proposal”). The Merger Agreement provides that, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into HoldCo, with HoldCo surviving the Merger as a wholly owned subsidiary of Parent. As consideration for the Merger, at the Effective Time, each share of HoldCo common stock outstanding immediately prior to the Effective Time (other than Excluded Shares and Dissenting Shares) will be automatically converted into the right to receive (i) $39.00 per share in cash, without interest and subject to applicable withholding taxes, plus (ii) one CVR that is a contractual right to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust out of distributions, if any, made by XOMA Royalty LLC, in each case as further described in this proxy statement/prospectus. Each share of HoldCo Series X Convertible Preferred Stock outstanding immediately prior to the Effective Time will be converted into the right to receive the Merger Consideration with respect to the aggregate number of shares of HoldCo common stock into which such share was convertible immediately prior to the Effective Time. Each share of HoldCo Series A Preferred Stock and HoldCo Series B Preferred Stock will be redeemed in accordance with the terms of the applicable certificate of designation, including payment of all accrued and unpaid dividends thereon through the redemption date.

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and is incorporated herein by reference. XOMA Royalty stockholders are urged to read the Merger Agreement carefully and in its entirety. For a summary of the Merger Agreement, the Merger and the Merger Consideration (including the CVRs), and a discussion of the related risks, see the sections captioned “The Merger,” “The Merger Agreement,” “Contingent Value Rights” and “Risk Factors” beginning on pages 40, 71, 92 and 18, respectively, of this proxy statement/prospectus. For a discussion of the U.S. federal income tax consequences of the Merger, see “U.S. Federal Income Tax Consequences of the Merger” beginning on page 104 of this proxy statement/prospectus.

The Merger Agreement provides that, as a condition to the consummation of the Merger, XOMA Royalty stockholders must approve both the Merger Agreement Proposal and the Holding Company Reorganization Proposal at the Special Meeting. The approval of the Merger Agreement Proposal is therefore necessary in order for the Merger to be completed. If XOMA Royalty stockholders do not approve the Merger Agreement Proposal, the Merger will not be completed.

The XOMA Royalty Board, after careful consideration, (i) determined that it is in the best interests of XOMA Royalty and its stockholders to enter into the Merger Agreement and the transactions contemplated thereby, including the Merger, (ii) adopted and approved, and declared advisable, the Merger Agreement and the transactions contemplated thereby on the terms and subject to the conditions set forth in the Merger Agreement, and (iii) resolved to recommend the approval of the Merger Agreement by XOMA Royalty stockholders.

THE XOMA ROYALTY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE MERGER AGREEMENT PROPOSAL (PROPOSAL NO. 1).

 

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PROPOSAL NO. 2: THE HOLDING COMPANY REORGANIZATION PROPOSAL

XOMA Royalty stockholders are being asked to consider and vote on a proposal to approve the Holding Company Reorganization, including the HoldCo Reorganization Merger Agreement (the “Holding Company Reorganization Proposal”). The Holding Company Reorganization is a step in the structure required to consummate the Merger. In the Holding Company Reorganization, a newly formed direct, wholly owned subsidiary of HoldCo will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty.

In connection with the Holding Company Reorganization, (i) each share of XOMA Royalty common stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of HoldCo common stock, having the same rights, powers and preferences as the corresponding share of XOMA Royalty common stock; (ii) each share (if any) of Series A Preferred Stock, Series B Preferred Stock and Series X Preferred Stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of HoldCo preferred stock, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as the corresponding share of Company Preferred Stock; and (iii) each Company equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to HoldCo common stock (or, as applicable, HoldCo preferred stock), on the same terms and conditions. Following the Holding Company Reorganization, HoldCo will assume all obligations of XOMA Royalty under the Merger Agreement, and Merger Sub will merge with and into HoldCo at the Effective Time, with HoldCo continuing as the surviving entity and becoming a wholly owned subsidiary of Parent.

The articles of incorporation and bylaws of HoldCo will be, immediately following the Holding Company Reorganization, substantially identical in all material respects to the existing articles of incorporation and bylaws of XOMA Royalty, except for changes necessary or appropriate to reflect the holding company structure and matters incidental thereto. For a more detailed description of the Holding Company Reorganization, the rights of HoldCo stockholders, and the material differences between the rights of XOMA Royalty stockholders and HoldCo stockholders, see the sections captioned “The Holding Company Reorganization” and “Comparison of Stockholders’ Rights” beginning on pages 100 and 110, respectively, of this proxy statement/prospectus. For a discussion of the U.S. federal income tax consequences of the Holding Company Reorganization, see “U.S. Federal Income Tax Consequences of the Merger” beginning on page 104. XOMA Royalty stockholders are encouraged to read the full text of the HoldCo Reorganization Merger Agreement, which is attached as Annex B hereto.

The Merger Agreement provides that, as a condition to the consummation of the Merger, XOMA Royalty stockholders must approve both the Merger Agreement Proposal and the Holding Company Reorganization Proposal at the Special Meeting. The approval of the Holding Company Reorganization Proposal is therefore necessary in order for the Merger to be completed. If XOMA Royalty stockholders do not approve the Holding Company Reorganization Proposal, the Merger will not be completed. Approval of the Holding Company Reorganization Proposal is conditioned upon, and will be deemed satisfied only if, the Merger Agreement Proposal is also approved by the requisite vote of the holders of XOMA Royalty common stock.

The XOMA Royalty Board, after careful consideration, determined that it is advisable and in the best interests of XOMA Royalty and its stockholders to effect the Holding Company Reorganization, all as contemplated by (i) the HoldCo Reorganization Merger Agreement and (ii) the Merger Agreement, and resolved to recommend the approval of the Holding Company Reorganization by XOMA Royalty stockholders.

It is a condition to the consummation of the Merger that XOMA Royalty stockholders approve the Holding Company Reorganization Proposal.

THE XOMA ROYALTY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE HOLDING COMPANY REORGANIZATION PROPOSAL (PROPOSAL NO. 2).

 

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PROPOSAL NO. 3: THE COMPENSATION PROPOSAL

XOMA Royalty stockholders are being asked to consider and vote, on a non-binding, advisory basis, to approve the compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement and the transactions contemplated therein (the “Compensation Proposal”). This proposal is being submitted to XOMA Royalty stockholders pursuant to Section 14A(b)(1) of the Exchange Act, which requires XOMA Royalty to seek a non-binding, advisory vote with respect to certain compensation that may be paid or become payable to its named executive officers in connection with the Merger.

The compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement, and the transactions contemplated therein, is described in the section captioned “The Merger—Quantification of Payments and Benefits to XOMA Royalty Named Executive Officers” beginning on page 66 of this proxy statement/prospectus and the accompanying golden parachute compensation table and footnotes. The various plans and arrangements pursuant to which the compensation described in such section may be paid or become payable form part of XOMA Royalty’s overall compensation program for its named executive officers, as previously disclosed in XOMA Royalty’s prior filings with the SEC, and the XOMA Royalty Board determined that such plans and arrangements were necessary and appropriate to attract and retain its named executive officers.

Certain payments under the underlying plans and arrangements are contractual in nature and are not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote on the Compensation Proposal, if the Merger Agreement Proposal and the Holding Company Reorganization Proposal are approved and the Merger is consummated, the compensation that may be paid or become payable to XOMA Royalty’s named executive officers in connection with the Merger will be eligible to be paid in accordance with the terms and conditions of the underlying plans and agreements and the Merger Agreement.

Approval of the Compensation Proposal is not a condition to the consummation of the Merger.

THE XOMA ROYALTY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE COMPENSATION PROPOSAL (PROPOSAL NO. 3).

 

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PROPOSAL NO. 4: THE ADJOURNMENT PROPOSAL

XOMA Royalty stockholders are being asked to consider and vote on a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal (the “Adjournment Proposal”). If XOMA Royalty stockholders approve the Adjournment Proposal, XOMA Royalty could adjourn the Special Meeting and any adjourned session of the Special Meeting and use the additional time to solicit additional proxies, including proxies from stockholders that have previously returned properly executed proxies voting against approval of the Merger Agreement Proposal or the Holding Company Reorganization Proposal. Among other things, approval of the Adjournment Proposal could mean that, even if XOMA Royalty had received proxies representing a sufficient number of votes against approval of the Merger Agreement Proposal or the Holding Company Reorganization Proposal such that either proposal would be defeated, XOMA Royalty could adjourn the Special Meeting without a vote on the Merger Agreement Proposal or the Holding Company Reorganization Proposal and seek to convince the holders of those shares to change their votes to votes in favor of approval of the Merger Agreement Proposal and the Holding Company Reorganization Proposal. Additionally, XOMA Royalty may seek to adjourn the Special Meeting if a quorum is not present or otherwise at the discretion of the chairperson of the Special Meeting.

XOMA Royalty does not anticipate calling a vote on the Adjournment Proposal if the Merger Agreement Proposal and the Holding Company Reorganization Proposal are approved at the Special Meeting. Approval of the Adjournment Proposal is not a condition to the consummation of the Merger.

THE XOMA ROYALTY BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ADJOURNMENT PROPOSAL (PROPOSAL NO. 4).

 

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THE MERGER

The following is a description of material aspects of the Merger. While XOMA Royalty believes that the following description covers the material terms of the Merger, the description may not contain all of the information that is important to you. You are encouraged to read carefully this entire proxy statement/prospectus, including the text of the Merger Agreement attached to this proxy statement/prospectus as Annex A, for a more complete understanding of the Merger. In addition, important business and financial information about each of XOMA Royalty is included in or incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus.

General

XOMA Royalty Corporation, a Nevada corporation (the “Company” or “XOMA Royalty”), Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Parent”), and Flex Merger Sub, Inc., a Nevada corporation and wholly owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger, dated as of April 27, 2026, as amended by Amendment No. 1 to the Agreement and Plan of Merger on May 16, 2026, by and among XOMA Royalty, Parent, Merger Sub and XOMA Royalty Holdings Corporation, a Nevada corporation and wholly owned subsidiary of XOMA Royalty (“HoldCo”), as it may be amended from time to time (as amended, the “Merger Agreement”). Pursuant to the terms and subject to the conditions thereof, including, without limitation, effecting the Holding Company Reorganization (as defined below), of the Merger Agreement, Merger Sub will merge with and into HoldCo (the “Merger”), with HoldCo surviving the Merger as a wholly owned subsidiary of Parent. Following the Holding Company Reorganization, unless the context otherwise requires, all references in this section to the “Company” or “XOMA Royalty” refer to HoldCo. Following the Holding Company Reorganization, HoldCo will assume all obligations of the Company under the Merger Agreement.

Merger Consideration

At the Effective Time, each eligible share of XOMA Royalty common stock will be converted into the right to receive $39.00 in cash, without interest and subject to applicable withholding taxes, plus one CVR. The treatment of Company Preferred Stock, Company equity awards and Company Warrants is described under the sections titled “The Merger Agreement—Merger Consideration” and “The Merger Agreement—Treatment of Company Equity Awards and Company Warrants” in this proxy statement/prospectus. For a detailed description of the CVRs, see the section titled “Contingent Value Rights” in this proxy statement/prospectus.

Completion and Effectiveness of the Merger

The closing of the Merger (the “Closing”), will take place on the third business day after the satisfaction or waiver of all conditions for completion of the Merger set forth in the Merger Agreement (other than those conditions to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions), or at such other time, place and/or date as Parent and XOMA Royalty may otherwise mutually agree in writing. The date on which the Closing actually takes place is referred to herein as the “Closing Date”.

On the date of the Closing, HoldCo and Merger Sub will file articles of merger (“Articles of Merger”) with the Nevada Secretary of State as provided under the NRS. The Merger will become effective at the time of the filing of the Articles of Merger with the Nevada Secretary of State or at such later time as may be designated jointly by Parent and HoldCo and specified in the Articles of Merger. The time at which the Merger becomes effective is referred to as the “Effective Time”.

Parent and XOMA Royalty are working to complete the Merger prior to 11:59 p.m., Eastern Time, on January 26, 2027 (the “Termination Date”). It is possible that factors outside the control of both parties could result in the Merger being completed at a different time, or not at all.

 

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Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the Merger Agreement. The following chronology does not purport to catalogue every conversation among the XOMA Royalty Board or representatives of XOMA Royalty, Parent and/or other parties.

XOMA Royalty is a royalty aggregator that plays a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA Royalty does this by providing capital in exchange for the economic rights to future milestone and royalty payments associated with clinical candidates and approved products. In return, the drug developer or marketer receives non-dilutive, non-recourse funding. XOMA Royalty seeks to generate stockholder value by maintaining a diversified portfolio to mitigate single-asset binary risk and by operating under a capital-efficient and low corporate cost structure.

XOMA Royalty was incorporated in Delaware in 1981. In 2017, XOMA Royalty undertook to transform its business model to become a royalty aggregator. XOMA Royalty subsequently advanced its portfolio by building upon its existing out-licensing agreements for proprietary products and platforms through the acquisition of rights to future milestones, royalties and commercial payments. Effective July 2024, XOMA Royalty changed its name from XOMA Corporation to XOMA Royalty Corporation. In May 2025, XOMA Royalty reincorporated from Delaware to Nevada.

As of the period of time that is relevant to the events described below, XOMA Royalty had a sizable portfolio of economic rights to future potential milestone and royalty payments associated with over 120 commercial and pre-commercial therapeutic candidates. The portfolio was anchored by royalty streams and milestone payments derived from seven commercial-stage assets. XOMA Royalty’s royalty aggregator business was primarily focused on early to mid-stage clinical assets, primarily in Phase 1 and 2 development, which XOMA Royalty believed had significant commercial sales potential and that were licensed to well-funded sponsors or developers with established expertise in developing and commercializing drugs. XOMA Royalty also acquired milestone and royalty revenue streams on late-stage clinical assets and commercial assets that were designed to address unmet markets or had a therapeutic advantage over other treatment options, and had long duration of market exclusivity.

XOMA Royalty’s strategy was to expand its portfolio by acquiring additional milestone and royalty revenue streams associated with product candidates from third parties. XOMA Royalty believed expanding its portfolio through these acquisitions allowed for further diversification across therapeutic areas and development stages, thereby mitigating single-asset binary exposure. Additionally, beginning with the acquisition of Kinnate Biopharma Inc. in 2024, XOMA Royalty acquired or served as the structuring agent for nine acquisitions of publicly traded and private biotech companies, which added a combination of cash and cash equivalents, material tax benefits, new therapeutic candidates capable of being licensed out for additional royalties and milestones, and/or economic interests in programs being developed by other pharmaceutical companies.

Unlike drug development companies within the broader life sciences sector, which may attract acquisition interest from a wide range of strategic and financial buyers, the royalty aggregator sector is a relatively narrow and specialized sector within the biopharmaceutical industry. As a result, the universe of potential strategic acquirors with the financial capacity, operational expertise and existing infrastructure to acquire and integrate a royalty aggregator business of XOMA Royalty’s scale is correspondingly limited. The XOMA Royalty Board and its advisors were mindful of this dynamic throughout the process described below.

On a periodic basis, Owen Hughes, Chief Executive Officer of the Company, and Brad Sitko, Chief Investment Officer of the Company, together with other members of XOMA Royalty’s senior management team, engaged in discussions with potential counterparties and financial sponsors regarding potential strategic transactions, financing opportunities, and other business development initiatives to enhance stockholder value. From time to time, these discussions have included XOMA Royalty’s strategy as a standalone company and

 

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potential opportunities for business combinations, partnerships, licensing arrangements, collaborations, significant single party financings and other strategic transactions.

On February 5, 2024, XOMA Royalty and Parent entered into a Mutual Confidentiality Agreement to facilitate discussions regarding potential business and collaborative opportunities between the parties, which did not contain standstill provisions.

Subsequent to a XOMA Royalty Board meeting held on October 14, 2025, XOMA Royalty engaged Leerink Partners LLC (“Leerink Partners”) as its financial advisor, and on January 17, 2026, XOMA Royalty engaged H.C. Wainwright & Co., LLC (“Wainwright”) as an additional financial advisor to provide further perspective on the strategic alternatives available to XOMA Royalty. XOMA Royalty’s management and the XOMA Royalty Board regularly consulted with Leerink Partners and Wainwright in the ordinary course of business regarding potential strategic opportunities.

In September and October 2025, representatives of XOMA Royalty discussed with representatives of a healthcare-focused investment firm, referred to herein as “Party E,” a potential loan with or minority investment into XOMA Royalty.

On September 10, 2025, during an in-person meeting with a representative of Wainwright in New York, Mr. Hughes requested that Wainwright approach Todd Davis, the Chief Executive Officer of Parent, regarding XOMA Royalty’s interest in discussing the potential to enter into a form of corporate transaction with Parent. On the same day, the representative of Wainwright discussed in-person with Mr. Davis the potential for a business combination of XOMA Royalty and Parent.

On October 23, 2025, Mr. Hughes and Mr. Sitko met with Mr. Davis and another representative of Parent in Boston to discuss recent business trends.

In addition to its discussions with Parent during this period, XOMA Royalty’s management engaged in discussions with several other parties regarding potential transactions or financing opportunities.

On November 24, 2025, Brad Sitko, Chief Investment Officer of XOMA Royalty, had a telephone conference with a representative of a financial sponsor focused on infrastructure and real assets, referred to herein as “Party C,” to review key updates in the XOMA Royalty business and discuss potential financing opportunities.

On December 3, 2025, Mr. Hughes and Mr. Sitko met with representatives of a global private equity firm, referred to herein as “Party B,” to discuss an overview of XOMA Royalty, key assets in the XOMA Royalty portfolio, XOMA Royalty’s positioning in the royalty aggregator space and business accomplishments in 2025.

During the period from late 2025 through early 2026, several publicly disclosed developments affecting programs in XOMA Royalty’s portfolio impacted the trading price of XOMA Royalty common stock, including (i) the December 11, 2025 announcement by Rezolute, Inc., a development partner of XOMA Royalty, that its Phase 3 sunRIZE clinical trial evaluating ersodetug for the treatment of congenital hyperinsulinism did not meet its primary or key secondary endpoints, (ii) the February 11, 2026, disclosure by Johnson & Johnson in its Annual Report on Form 10-K for the fiscal year ended December 29, 2025 regarding royalty proceedings related to TREMFYA^® (guselkumab), a product with respect to which XOMA Royalty had initiated litigation against Janssen Biotech, Inc. asserting claims for breach of contract and unjust enrichment arising from Janssen’s alleged unauthorized use of XOMA Royalty’s intellectual property and (iii) the February 23, 2026 announcement by Gossamer Bio, Inc. that its Phase 3 PROSERA study evaluating seralutinib for the treatment of pulmonary arterial hypertension did not meet its primary endpoint. The XOMA Royalty Board and XOMA Royalty’s management were aware of these developments and considered their impact on the value of XOMA Royalty’s portfolio and the trading price of XOMA Royalty common stock in the context of the strategic process described herein.

 

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On December 16, 2025, Parent submitted an initial non-binding proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $24.10 per share upfront in cash, plus $4.05 per share in Parent common stock, plus $4.15 per share in contingent consideration payable upon the achievement of $150 million in annual global royalty receipts in any one calendar year between January 1, 2027 and December 31, 2030, representing total consideration of $32.30 per share (the “December 16^th Parent Proposal”). The December 16^th Parent Proposal was contingent upon XOMA Royalty’s completion of a contemplated royalty swap transaction with Takeda Pharmaceutical Company Limited prior to entering into a definitive agreement. Parent indicated that it would finance the acquisition with a combination of cash on hand and new and/or existing debt, and that its obligation to consummate the acquisition would not be subject to any financing contingency. Parent identified Stifel, Nicolaus & Company, Incorporated (“Stifel”) as its financial advisor and Paul Hastings LLP (“Paul Hastings”) as its legal counsel for the transaction.

On December 16, 2025, XOMA Royalty’s management discussed the December 16^th Parent Proposal with certain members of the XOMA Royalty Board.

On December 17, 2025, Mr. Hughes provided feedback to Mr. Davis that the December 16^th Parent Proposal was deficient in a number of ways, including with respect to price, structure and implied timing of the contingent consideration.

Also on December 17, 2025, Mr. Hughes and Mr. Sitko met with representatives of Party B to discuss key business development updates, further overview of the XOMA Royalty portfolio and potential financing opportunities.

On December 18, 2025, a representative of Leerink Partners spoke with a representative of Stifel to address questions and reinforce Mr. Hughes’ message that the December 16^th Parent Proposal was deficient in a number of ways, including with respect to price, structure and implied timing of the contingent consideration.

On December 22, 2025, XOMA Royalty entered into a confidentiality agreement, which contained standstill provisions without a “don’t ask, don’t waive” provision, with a publicly traded biopharmaceutical company, referred to herein as “Party D,” to facilitate discussions regarding a potential transaction.

On December 30, 2025, Mr. Hughes and Mr. Sitko met with representatives of Party D to discuss an overview of XOMA Royalty, key assets in the XOMA Royalty portfolio, XOMA Royalty’s positioning in the royalty aggregator space and business accomplishments in 2025.

On January 1, 2026, Mr. Davis contacted Mr. Hughes to suggest the companies meet at the JPM Healthcare Conference in San Francisco to discuss a potential transaction. Mr. Hughes declined to meet with Parent given the deficiencies in the December 16^th Parent Proposal.

On January 6, 2026, diligence calls were held between Party D and XOMA Royalty related to historical acquisitions and tax matters.

On January 7, 2026, Parent submitted a revised non-binding proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $30.50 per share upfront in cash, plus $2.00 per share in contingent consideration upon achievement of $60 million in annual global royalty receipts in any full calendar year by the end of 2027, plus $2.00 per share in contingent consideration upon achievement of $150 million in annual global royalty receipts in any full calendar year by the end of 2030, representing total consideration of $34.50 per share (the “January 7^th Parent Proposal”). Parent requested a 30-day period of exclusivity to complete confirmatory due diligence and negotiate definitive agreements. Over the ensuing days, XOMA Royalty’s management discussed the January 7^th Parent Proposal with certain members of the XOMA Royalty Board.

On January 9, 2026, Mr. Hughes provided feedback to Mr. Davis that the January 7^th Parent Proposal was deficient in a number of ways, including with respect to price.

 

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On January 9, 2026, a representative of Leerink Partners discussed with a representative of Stifel to reinforce the feedback that the January 7^{th Parent Proposal was deficient.}

On January 13, 2026, two representatives of Wainwright met in-person with the CEO and a Senior Managing Director of a healthcare-focused investment firm, referred to herein as “Party A”, whereby Party A indicated its interest in holding a phone call or meeting with Mr. Hughes while the parties were in San Francisco.

On January 13, 2026, Mr. Hughes met with the Chief Executive Officer and Chief Investment Officer of Party D.

On January 16, 2026, Mr. Hughes reached out to Party A to discuss potential interest in XOMA Royalty.

On January 22, 2026, Parent submitted a further revised non-binding proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $32.00 per share upfront in cash, plus $7.00 per share in contingent consideration upon achievement of $175 million in annual global royalty receipts in any full calendar year by the end of 2030, representing total consideration of up to $39.00 per share (the “January 22^nd Parent Proposal”). Parent again requested a 30-day period of exclusivity.

Also on January 22, 2026, XOMA Royalty and Party A entered into a mutual confidentiality agreement, which contained standstill provisions without a “don’t ask, don’t waive” provision.

On January 27, 2026, the XOMA Royalty Board held a meeting at which members of senior management and representatives of Gibson, Dunn & Crutcher LLP (“Gibson Dunn”), XOMA Royalty’s outside legal counsel, Leerink Partners and Wainwright were present. At this meeting, Mr. Hughes stated that the purpose of the meeting was to discuss the non-binding acquisition proposals submitted by Parent. Mr. Hughes noted that he had previously discussed the proposals with each of the XOMA Royalty Board members. Representatives of Leerink Partners then reviewed the history of the proposals from Parent, including the implied equity value for XOMA Royalty under each bid and the proposed contingent value right component of the proposal. A discussion followed regarding the XOMA Royalty Board’s desire to maximize long-term value for XOMA Royalty and its stockholders, whether through remaining independent or selling XOMA Royalty at an appropriate price that fully values XOMA Royalty. Representatives of Leerink Partners then discussed management’s preliminary revenue forecast, including the assumptions and probabilities of success underlying the revenue forecast, and its preliminary financial analysis of XOMA Royalty based upon management’s forecasts. Following this discussion, the XOMA Royalty Board determined that Parent’s proposals, including the January 22^nd Parent Proposal, failed to adequately value XOMA Royalty. Accordingly, the XOMA Royalty Board directed management and representatives of Leerink Partners to communicate this determination to Parent and to continue to explore all options to maximize stockholder value.

On January 29, 2026, a representative of Leerink Partners spoke with a representative of Stifel, and XOMA Royalty’s management spoke with Parent’s management, to provide feedback from the XOMA Royalty Board meeting regarding the January 22^nd Parent Proposal.

On January 30, 2026, XOMA Royalty had a meeting with representatives of Party A to discuss key clinical and commercial assumptions related to mid-stage, late-stage and commercial assets in XOMA Royalty’s portfolio.

During the period between the January 27, 2026 Board meeting and the April 3, 2026 Board meeting, Mr. Hughes kept the members of the XOMA Royalty Board apprised of developments with respect to discussions with Parent and the other parties on an ongoing basis, including through periodic individual updates to the directors.

On February 4, 2026, XOMA Royalty and Party B entered into a mutual confidentiality agreement, which did not contain standstill provisions.

 

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On February 6, 2026, a representative of Stifel contacted a representative of Leerink Partners to suggest a principal-to-principal meeting, including a representative of XOMA Royalty’s largest stockholder, to discuss the framework of a potential transaction that could be of interest to XOMA Royalty. Mr. Hughes discussed with XOMA Royalty’s advisors, including Gibson Dunn, and determined that he would not meet with Parent at this time.

On February 17, 2026, Mr. Hughes and Mr. Sitko had a discussion with Party B related to their interest in exploring a potential financing transaction.

On February 18, 2026, the Chief Executive Officer of Party A contacted Mr. Hughes to suggest a meeting between Mr. Hughes and a representative of Party A to discuss a potential transaction.

On February 24, 2026, Mr. Hughes and Mr. Sitko met with representatives of Party B to discuss key assets in the XOMA Royalty portfolio, capital needs to execute the strategy and positioning in the royalty aggregator space.

On March 2, 2026, Mr. Hughes, Mr. Sitko and Jeff Trigilio, Chief Financial Officer of XOMA Royalty, had an in-person meeting with representatives of Party C to review key aspects of the XOMA Royalty business and understand key potential financing or transaction structures, including a change of control transaction.

Also on March 2, 2026, Mr. Hughes and Mr. Sitko met with representatives of Party A in Boston. During this meeting, Party A indicated that it was working toward a change of control proposal that would likely imply a per share value in the high $30s. Party A further indicated that the key components of its due diligence would focus on the Company’s cash position, tax assets and the ongoing Janssen Litigation.

On March 4, 2026, Mr. Hughes and Mr. Davis and another representative of Parent had an in-person meeting where Mr. Hughes provided an update on XOMA Royalty’s business.

On March 11, 2026, Mr. Hughes, Mr. Sitko and Mr. Trigilio met with Party A in Miami. Party A informed the representatives of XOMA Royalty that it was exploring how the tax assets and Janssen Litigation could be valued or separated and reaffirmed it was working toward a change of control proposal that implied a per share value in the high $30s.

Also on March 11, 2026, Mr. Hughes and Mr. Sitko met with a representative of Party B who expressed interest in submitting a proposal for an investment of likely $150 million, including both primary shares and secondary shares from existing stockholders.

On March 12, 2026, Mr. Sitko and a representative of Wainwright met with the Chief Financial Officer of Parent in Miami and discussed the strategic merits of a potential transaction, such as potential operating, financial and tax attributes.

On March 14, 2026, Mr. Hughes and Mr. Sitko had a call with representatives of Party B, which indicated that Party B continued to progress with respect to its evaluation of the proposed structure of a potential transaction.

On March 16, 2026, Mr. Hughes, Mr. Sitko and Mr. Trigilio had an in-person meeting with Party A to review key aspects of the XOMA Royalty business, understand key potential transactions and explore capital needs to continue to execute the strategy.

Also on March 16, 2026, XOMA Royalty and Party C entered into a mutual confidentiality agreement, which contained standstill provisions without a “don’t ask, don’t waive” provision.

 

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On March 17, 2026, Party B submitted a non-binding proposal for an investment in XOMA Royalty of up to $200 million total, structured as a $75 million primary investment into XOMA Royalty and $75–125 million secondary equity purchase from existing XOMA Royalty stockholders.

On March 25, 2026, Party C was provided access to a confidential data room.

Also on March 25, 2026, Party A submitted a non-binding proposal for the acquisition of 100% of the outstanding shares of XOMA Royalty capital stock for $34.00 per share in cash at closing, plus a contingent value right entitling holders to receive a pro rata share of 25% of the litigation proceeds from the Janssen Litigation (whether by way of settlement or a final, non-appealable judgment) received by XOMA Royalty in excess of $100 million, plus amounts spent by the Company in connection with the litigation subsequent to March 31, 2026 (the “March 25^th Party A Proposal”). The March 25^th Party A Proposal was based on XOMA Royalty’s current balance sheet and assumed that at signing, the Company would have at least $80 million of unrestricted cash and approximately 18.5 million common shares outstanding on a fully-diluted basis. Party A stated that it was confident in its ability to move quickly and sign a definitive transaction agreement within 30 days of executing a letter of intent. Party A indicated that its proposal would be fully financed at the time of signing and would not be subject to any financing contingency.

On March 26, 2026, Party A contacted Mr. Hughes to discuss the March 25^th Party A Proposal. Mr. Hughes noted that Party A had indicated it would likely submit a proposal with per share consideration “in the high $30s,” and that the current proposal was disappointing in that context. Party A suggested to Mr. Hughes that Party A could reconsider the March 25^th Party A Proposal and that there was likely additional flexibility with respect to the financial terms of the March 25^th Party A Proposal.

Also on March 26, 2026, a representative of Leerink Partners spoke with a representative of Citigroup Global Markets, Incorporated (“Citi”), co-advisor to Parent, and indicated that XOMA Royalty had received another acquisition proposal and that Parent should submit a revised proposal by April 1, 2026 if it wished to have its proposal considered by the XOMA Royalty Board.

On March 31, 2026, a representative of Leerink Partners discussed with the advisor of Party A’s board of directors the March 26^th Party A Proposal.

On April 1, 2026, Party A submitted a revised non-binding proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $34.00 per share in cash at closing, plus a contingent value right entitling holders to receive a pro rata share of 55% of the litigation proceeds from the Janssen Litigation received in excess of $100 million plus amounts spent in connection with the litigation subsequent to March 31, 2026 (the “April 1^st Party A Proposal”). All other terms remained consistent with the March 25^th Party A Proposal.

Also on April 1, 2026, Parent submitted a revised non-binding proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $37.50 per share upfront in cash plus contingent consideration of one non-transferable contingent value right per share providing holders with an opportunity to receive 67% of the net proceeds received from the ongoing Janssen Litigation (the “April 1st Parent Proposal”). The amount of net proceeds would equal the amount received from Janssen minus all litigation-related expenses incurred by Parent. Parent requested a 15-day period of exclusivity.

On April 2, 2026, following feedback from Leerink Partners that the balance sheet assumptions in the April 1^st Parent Proposal were incorrect, Parent submitted a revised proposal reducing the upfront cash consideration from $37.50 to $37.00 per share, with all other terms remaining the same.

On April 3, 2026, the XOMA Royalty Board held a meeting at which members of senior management and representatives of Gibson Dunn, Leerink Partners and Wainwright were present. At this meeting, Mr. Hughes reported on XOMA Royalty’s recent and ongoing strategic discussions, including four potential paths that

 

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XOMA Royalty could take from this current inflection point, namely: (a) doing nothing, (b) pursuing a royalty-backed loan with Party E, (c) pursuing a strategic partnership with Party B, or (d) being acquired by Parent or Party A. Mr. Hughes led a discussion regarding the economics and advantages and disadvantages of the various options, including the mechanics of separating the Janssen Litigation and the potential costs and financing alternatives with respect to the litigation expenses, as well as the anticipated tax consequences. Representatives

of Leerink Partners discussed its preliminary financial analysis of XOMA Royalty based on management’s forecasts and then reviewed the offers from Parent and Party A. The XOMA Royalty Board next discussed proposed next steps for engaging with Party A and Parent, including with respect to obtaining best and final offers from each party and the advantages and disadvantages of reaching out to additional parties beyond the prior extensive outreach that had been conducted.

On April 4, 2026, Leerink Partners instructed both Party A and Parent to submit best and final proposals by April 15, 2026.

On April 7, 2026, Parent and Party A were each granted access to XOMA Royalty’s virtual data room. Also on April 7, 2026, Party D requested additional information related to XOMA Royalty’s portfolio.

On April 8, 2026, at the Company’s request, Leerink Partners shared a draft merger agreement (as prepared by Gibson Dunn) with both Party A and Parent. Also on April 8, 2026, diligence calls were held between Party A and XOMA Royalty related to tax matters.

Also on April 8, 2026, Mr. Hughes, Mr. Sitko and Mr. Trigilio met with a representative of Party C and its advisor, TD Cowen, to discuss key assets in the XOMA Royalty portfolio, capital needs to execute the strategy, and differentiated positioning in the royalty aggregator space. Party C requested to explore a joint transaction with Party D to provide a more comprehensive proposal.

On April 10, 2026, Mr. Hughes, Mr. Sitko and Mr. Trigilio met with a representative of Party C and its advisor, TD Cowen, to discuss potential transaction structure and the ongoing process.

On April 13, 2026, Parent and XOMA Royalty held diligence calls.

On April 15, 2026, Parent submitted its best and final proposal for the acquisition of 100% of the capital stock of XOMA Royalty for $40.00 per share in cash plus contingent consideration of one non-transferable contingent value right per share tied to the Janssen Litigation proceeds (the “April 15^th Parent Proposal”). Parent offered three alternative structures for the treatment of the Janssen Litigation in the CVR: (a) carving out the Janssen Litigation claims from XOMA Royalty prior to closing, with former XOMA Royalty shareholders retaining 100% of any future cost or value (with no contingent value right issued by Parent in this scenario); (b) following closing, each contingent value right providing holders with an opportunity to receive, on a per share basis, 80% of the net proceeds from the litigation after repayment of external litigation funding sources, with the litigation directed by former XOMA Royalty personnel and funded by third-party financing; or (c) following closing, Parent fully funding and retaining control over the litigation, with each contingent value right providing holders with an opportunity to receive, on a per share basis, 50% of the net proceeds after repayment of expenses. Parent also submitted a mark-up of the definitive merger agreement and an exclusivity agreement, and indicated it was prepared to sign and announce a transaction on April 20, 2026. Parent noted it had completed its due diligence except for review of unredacted copies of agreements underpinning Phase 2 through commercial royalty assets, sealed filings related to the Janssen Litigation, and finalization of the contingent value right structure and agreement.

Also on April 15, 2026, Party A submitted a revised proposal that transitioned from an acquisition structure to an investment structure, proposing to invest $250 million in XOMA Royalty, with the ability to invest up to an additional $150 million that could be used to facilitate a recapitalization or to make additional royalty purchases (the “April 15^th Party A Proposal”). Party A indicated it was largely done with diligence and was confident it could complete diligence and sign in less than three weeks.

 

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On April 16, 2026, Mr. Hughes, Mr. Sitko and Mr. Trigilio had a meeting with representatives of Party C and TD Cowen, after which Party C submitted a non-binding proposal for the acquisition of XOMA Royalty’s late-stage portfolio for $675 million or, alternatively, a royalty bond financing of $575 million (the “Party C Proposal”), which did not include a joint transaction with Party D, as Party C and Party D were not able to mutually agree on a joint transaction structure.

Also on April 16, 2026, the XOMA Royalty Board held a meeting at which members of senior management and representatives of Gibson Dunn and Leerink Partners were present. At this meeting, Mr. Hughes reported on XOMA Royalty’s recent and ongoing strategic discussions, including (a) the April 15^th Parent Proposal, (b) a verbal indication received from Party B, wherein Party B communicated that they could accomplish a similar transaction to the proposal from Parent, but that it would take several weeks of diligence and their ultimate execution was uncertain, (c) the Party C Proposal, and (d) the April 15^th Party A Proposal, which was less favorable than the April 1^st Party A Proposal. A discussion ensued, including the dynamics of potentially accepting an offer at a modest premium and the rationale for why the XOMA Royalty Board may choose to do so. Representatives of Leerink Partners discussed Leerink Partners’ preliminary financial analysis of XOMA Royalty based on management’s forecasts and reviewed the key terms of the various offers received in comparison to each other and the series of purchase price improvements that the Company had been able to achieve since the commencement of the process. Representatives of Leerink Partners also reviewed the bidding structure that led to these offers, including the request that bidders make their best and final offers, noting that Parent had designated its offer as its best and final offer, and the transaction structures being proposed by Parent. Mr. Hughes reviewed certain logistical next steps with respect to the separation of the Janssen Litigation, including the mechanics of the contingent value rights spin. Representatives of Gibson Dunn reviewed the key terms of the revised draft merger agreement received from Parent. The XOMA Royalty Board then discussed the considerations in offering exclusivity to Parent and the terms on which XOMA Royalty may be willing to grant this accommodation. Following discussion, the XOMA Royalty Board authorized management to provide Parent with a period of exclusive negotiations through April 22, 2026 to finalize diligence and the merger and contingent value rights agreements.

On April 16, 2026, Mr. Hughes called Mr. Davis to provide the XOMA Royalty Board’s response, and Leerink Partners contacted Stifel to provide the XOMA Royalty Board’s response.

On April 17, 2026, XOMA Royalty and Parent executed an exclusivity agreement. Party A’s data room access was terminated. Also on April 17, 2026, Mr. Hughes discussed with Mr. Davis a change in the allocation of the Janssen Litigation claims from 80% of the net proceeds to 90% of the net proceeds. In addition, on April 17, 2026, negotiations between XOMA Royalty’s management and all parties other than Parent ceased.

On April 18, 2026, Gibson Dunn sent materials to Paul Hastings regarding a contingent value right carve-out structure and a revised merger agreement.

On April 19, 2026, Paul Hastings, Gibson Dunn, Parent and XOMA Royalty held an all-hands call.

On April 20, 2026, Paul Hastings sent a revised merger agreement to Gibson Dunn.

On April 21, 2026, Paul Hastings, Gibson Dunn, Parent and XOMA Royalty held another all-hands call.

On April 22, 2026, a royalty agreements diligence call was held between Parent and XOMA Royalty.

Also on April 22, 2026, the XOMA Royalty Board held a meeting at which members of senior management and representatives of Gibson Dunn, Leerink Partners and Wainwright were present. At this meeting, Mr. Hughes reported on the status of XOMA Royalty’s engagement with Parent and the anticipated timing to a potentially approvable transaction. Representatives of Gibson Dunn reviewed the key terms of the merger agreement and the contingent value rights agreement and the open items with respect therein, as well as the treatment of the equity awards under such agreements. Representatives of Leerink Partners reviewed Leerink Partners’ preliminary financial analysis of the April 15^th Parent Proposal, as well as the series of purchase price improvements that XOMA Royalty had been able to achieve since the commencement of the process.

 

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Also on April 22, 2026, Parent raised a diligence concern relating to certain aspects of XOMA Royalty’s portfolio. Subsequently, Mr. Davis orally delivered a revised proposal of $36.00 per share to Mr. Hughes, Mr. Sitko and Mr. Trigilio, representing a $4.00 per share reduction from the April 15th Parent Proposal. XOMA Royalty’s management, together with its financial and legal advisors, consulted with the XOMA Royalty Board regarding the revised proposal and recommended that the XOMA Royalty Board reject the revised proposal. Following discussion, the XOMA Royalty Board directed management to terminate discussions with Parent. Data room access was terminated and XOMA Royalty sent a letter notifying Parent that the period of exclusive negotiations had terminated and would not be extended.

On April 24, 2026, a representative of Stifel reached out to a representative of Leerink Partners to ask for data room access to be restored and for the parties to discuss a potential path forward. Following consultation with management and legal advisors, a representative of Leerink Partners responded with three conditions: (i) Parent would confirm a per share price acceptable to the XOMA Royalty Board by mid-day on Saturday, April 25, 2026; (ii) Parent would confirm there were no remaining open issues in the merger agreement or ancillary transaction documents; and (iii) Parent would commit to executing definitive agreements and announcing the transaction by Monday, April 27, 2026 before the opening of trading.

On April 25, 2026, a representative of Stifel contacted a representative of Leerink Partners with Parent’s final proposal (the “April 25th Parent Proposal”), which was responsive to the conditions set forth by Leerink Partners on April 24, 2026 and which provided as follows: (1) Parent was prepared to offer $39.00 per share to acquire XOMA Royalty; (2) Parent would require 25% of the net litigation proceeds under the contingent value right to be retained by Parent; (3) Parent did not believe there were remaining open issues in the legal agreements; and (4) Parent would be prepared to announce a transaction on the above terms by Monday, April 27, 2026 before the opening of trading on Nasdaq. Later in the day, access to the data room was restored to Parent and its advisors. Also on April 25, 2026, Paul Hastings, Gibson Dunn, Parent and XOMA Royalty held an all-hands call.

On April 26, 2026, the XOMA Royalty Board held a meeting at which members of senior management and representatives of Gibson Dunn, Leerink Partners and Wainwright were present. At this meeting, Mr. Hughes reported on the April 25th Parent Proposal. Mr. Hughes explained the economic impact (after-tax) to XOMA Royalty’s stockholders of the revised purchase price, which had been reduced from $40.00 per share to $39.00 per share, and the related change in the allocation of the Janssen Litigation claims from a 90/10 split to a 75/25 split, with the 75% portion being spun out through a contingent value right spin structure, which would allow XOMA Royalty to continue to control the litigation post-closing. Representatives of Gibson Dunn reviewed the updated revised draft merger agreement, including the structure of the merger and changes from the version presented at the prior meeting of the XOMA Royalty Board held on April 22, 2026. Representatives of Leerink Partners discussed Leerink Partners’ analysis of the financial terms of the proposed Merger, following which Leerink Partners rendered to the XOMA Royalty Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated April 26, 2026, that, as of such date and based upon and subject to the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the closing consideration of $39.00 proposed to be paid to holders of Shares pursuant to the terms of the Merger Agreement was fair, from a financial point of view, to such holders. A representative of Leerink Partners also provided a relationship disclosure regarding XOMA Royalty and Parent. The XOMA Royalty Board then met in executive session, with representatives of Gibson Dunn present. The XOMA Royalty Board discussed the April 25th Parent Proposal and the Leerink Partners fairness opinion. A discussion ensued regarding the April 25th Parent Proposal, other proposals solicited by XOMA Royalty and stand-alone business prospects, after which, based on factors cited in the section titled “The Merger—Recommendation of the XOMA Royalty Board of Directors; XOMA Royalty’s Reasons for the Merger,” upon motion duly made, seconded and unanimously carried, the XOMA Royalty Board unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to and in the best interests of XOMA Royalty and its stockholders, (ii) approved and adopted the Merger Agreement and approved the transactions contemplated thereby, including the Merger, and (iii) and resolved to recommend that XOMA Royalty’s stockholders approve the Merger Agreement and the transactions contemplated thereby.

 

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On April 27, 2026, XOMA Royalty, Parent and Merger Sub executed the Merger Agreement.

Before the opening of trading on Nasdaq on April 27, 2026, XOMA Royalty and Parent issued a joint press release to announce the execution of the Merger Agreement, and each of XOMA Royalty and Parent filed a Current Report on Form 8-K, each of which included the Merger Agreement.

Recommendation of the XOMA Royalty Board of Directors; XOMA Royalty’s Reasons for the Merger

At its meeting held on April 26, 2026, the XOMA Royalty Board:

 

•

determined that the terms of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable, fair to, and in the best interests of XOMA Royalty and its stockholders;

 

•

adopted, approved and declared advisable the Merger Agreement, the other Transaction documents to which XOMA Royalty is a party and the transactions contemplated thereby, including the Merger; and

 

•

resolved to recommend that XOMA Royalty stockholders approve the Merger Agreement and the transactions contemplated thereby (the “XOMA Board Recommendation”).

Accordingly, the XOMA Royalty Board recommends that XOMA Royalty stockholders vote “FOR” the Merger Agreement Proposal and the transactions contemplated by the Merger Agreement.

In its determinations and in reaching its recommendations, the XOMA Royalty Board, as described in the section titled “—Background of the Merger,” held a substantial number of meetings, consulted with XOMA Royalty’s senior management and its outside legal and financial advisors, and considered a number of factors and a substantial amount of information, including but not limited to the following factors (not necessarily presented in order of relative importance) that weighed in favor of the Merger.

 

•

Merger Consideration and Premium. The XOMA Royalty Board considered the Merger Consideration of $39.00 per share in cash, as well as the CVR structure pursuant to which stockholders would receive one non-transferable CVR per share entitling its holder to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust out of distributions, if any, made by XOMA Royalty LLC. The XOMA Royalty Board considered that the Merger Consideration provides certainty of value and immediate liquidity to XOMA Royalty stockholders, while the CVRs provide XOMA Royalty stockholders with the opportunity to participate in additional upside from the outcome of the Janssen Litigation. The XOMA Royalty Board also considered that the Closing Amount of $39.00 per share represents: (i) an approximately 29% premium to XOMA Royalty’s closing share price of $30.20 on March 25, 2026, which was the last trading day prior to Leerink Partners being instructed to contact additional parties that had expressed interest in an acquisition of the Company; (ii) an approximately 68% premium to XOMA Royalty’s closing share price of $23.27 on February 11, 2026, which was the last trading day prior to the post-market disclosure of the Janssen Litigation in an SEC filing on February 11, 2026; (iii) an approximately 23% premium to XOMA Royalty’s 60-calendar day volume-weighted average share price of $31.61; and (iv) an approximately 41% premium to XOMA Royalty’s 90-calendar day volume-weighted average share price of $27.66, in each case as of April 24, 2026.

 

•

CVRs. The XOMA Royalty Board considered the CVR structure, pursuant to which XOMA Royalty stockholders would receive CVRs entitling its holder to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust out of distributions, if any, made by XOMA Royalty LLC. The XOMA Royalty Board considered that the CVR structure would permit stockholders to retain the potential for meaningful upside participation in the outcome of the Janssen Litigation, while also providing certainty of value through the $39.00 per share Closing Amount payable at the Effective Time (see the section titled

 

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“Contingent Value Rights” in this proxy statement/prospectus). In addition, see the section titled “U.S. Federal Income Tax Consequences of the Merger—U.S. Holders—Tax Treatment of the Merger, Receipt of the CVRs and Payments on the CVRs” in this proxy statement/prospectus.

 

•

Competitive Process and Thorough Market Check. The XOMA Royalty Board considered the thorough process conducted by XOMA Royalty and its financial advisors over the course of several months, during which XOMA Royalty engaged with multiple parties regarding potential strategic alternatives, including change of control transactions, minority investments, royalty-backed financings and acquisitions of portfolio assets. The XOMA Royalty Board considered the fact that this process resulted in proposals from four distinct parties, and that the Merger Consideration represented the most favorable proposal received by XOMA Royalty following multiple rounds of bidding and negotiation.

 

•

Likelihood of Consummating an Alternative Transaction. The XOMA Royalty Board considered the likelihood of consummating an alternative sale transaction or entering into strategic relationships with other third parties, including the following: (i) Party A’s final proposal had transitioned from an acquisition to a minority investment structure, which was less favorable than the Merger; (ii) Party B had communicated that it could potentially accomplish a transaction similar to the Parent proposal but that it would require several additional weeks of diligence and its ultimate execution was uncertain; (iii) Party C’s proposal was limited to an acquisition of certain portfolio assets or a royalty-backed financing, neither of which provided the same certainty of value to all stockholders as the Merger; and (iv) the other potential counterparties contacted during the process had not submitted actionable proposals.

 

•

Stand-Alone Business Prospects. The XOMA Royalty Board considered the business, operations, financial condition, competitive position and prospects of XOMA Royalty, including the risks and uncertainties relating to XOMA Royalty’s business, including ongoing financing needs to execute on the stand-alone business plan, concentration risk, the speculative nature of development-stage assets, and current economic, industry and market conditions affecting XOMA Royalty.

 

•

Series of Purchase Price Improvements. The XOMA Royalty Board considered the series of purchase price improvements that XOMA Royalty had been able to achieve since the commencement of the process, from Parent’s initial proposal of $24.10 per share upfront in cash, plus $4.05 per share in Parent common stock (plus $4.15 per share in contingent consideration payable upon the achievement of $150 million in annual global royalty receipts in any calendar year between January 1, 2027 and December 31, 2030) in December 2025 to the final Merger Consideration of $39.00 per share in cash plus the CVR, reflecting management’s and the financial advisors’ successful execution of the negotiation strategy.

 

•

Financial Analysis and Fairness Opinion. The XOMA Royalty Board considered the financial analyses presented by Leerink Partners and the oral opinion of Leerink Partners, which was subsequently confirmed by delivery of a written opinion dated April 26, 2026 that, as of such date and based upon and subject to the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Closing Amount proposed to be paid to holders of shares pursuant to the Merger Agreement was fair, from a financial point of view, to such holders (see the section titled “—Opinion of Leerink Partners, XOMA Royalty’s Lead Financial Advisor”). The XOMA Royalty Board further noted that the Leerink Partners opinion did not value the Janssen Litigation claims, of which 75% of the net proceeds (if any) are being paid out to XOMA Royalty stockholders through CVRs.

 

•

Terms and Conditions of the Merger Agreement. The determination that the terms and conditions of the Merger Agreement and the transactions contemplated thereby, taken as a whole, are reasonable, including but not limited to consideration of the following factors:

 

•

the representations, warranties and covenants provided by Parent;

 

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•

the restrictions on XOMA Royalty’s ability to solicit, engage in negotiations or discussions concerning or enter into agreements relating to competing acquisition proposals, subject to the ability of the XOMA Royalty Board, under certain circumstances, to consider certain competing acquisition proposals and to change the XOMA Board Recommendation;

 

•

the commitment on the part of Parent to complete the Merger and the limited nature and absence of, in the belief of the XOMA Royalty Board, any closing conditions under the Merger Agreement that are unlikely to be satisfied and the likelihood that the Merger will be completed on a timely basis;

 

•

the increased likelihood of obtaining the required Company Stockholder Approval (as defined in the Merger Agreement) due, in part, to the Support Agreement with BVF, pursuant to which BVF Partners and certain affiliated funds entered into voting agreements in support of the Merger;

 

•

the fact that Parent’s obligation to consummate the Merger is not subject to any financing contingency and that Parent currently has sufficient cash, available lines of credit or other sources of immediately available funds to consummate the transactions contemplated by the Merger Agreement;

 

•

the regulatory approvals required for the Merger, including under the HSR Act, and the likelihood of obtaining such approvals in a timely manner;

 

•

the treatment of XOMA Royalty’s equity awards, warrants, and preferred stock under the Merger Agreement; and

 

•

the fact that XOMA Royalty stockholders will have an opportunity to vote on the approval of the Merger Agreement and the transactions contemplated thereby.

 

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Board’s Fiduciary Duties. The XOMA Royalty Board considered its fiduciary duties to XOMA Royalty and its stockholders under Nevada law.

The XOMA Royalty Board weighed the above factors against a number of potentially negative factors in its deliberations, including but not limited to the following factors (not necessarily presented in order of relative importance):

 

•

the fact that the Merger Consideration is fixed at $39.00 per share in cash and will not be adjusted for changes in XOMA Royalty’s business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, XOMA Royalty’s common stock, and that if the Merger is completed, XOMA Royalty’s stockholders will forego the opportunity to realize the potential long-term value of the successful execution of XOMA Royalty’s current strategy as an independent company;

 

•

the possibility that the Merger may not be completed or that completion may be delayed for reasons beyond the control of XOMA Royalty or Parent;

 

•

the restrictions on XOMA Royalty’s ability to solicit, engage in negotiations or discussions concerning or enter into agreements relating to competing acquisition proposals;

 

•

the contractual restrictions on the conduct of XOMA Royalty’s business between the signing of the Merger Agreement and the effective time, which although believed to be reasonable and not unduly burdensome, may delay or prevent XOMA Royalty from undertaking business opportunities that may arise or other actions it would otherwise take with respect to the operations of XOMA Royalty;

 

•

the substantial costs incurred and to be incurred in connection with the Merger, including those that could be incurred regardless of whether the Merger is consummated;

 

•

the fact that XOMA Royalty may be required to pay Parent a termination fee under certain circumstances;

 

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•

the fact that receipt of the Merger Consideration is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes;

 

•

the possibility that the CVRs may expire with no value, as the Janssen Litigation is at an early stage and there is no assurance that the Janssen Litigation will yield any recovery; and

 

•

the risks of the type and nature described in the section titled “Risk Factors” and the matters described in the section titled “Cautionary Statement Regarding Forward-Looking Statements” in this proxy statement/prospectus.

The XOMA Royalty Board considered all of these factors and, on balance, concluded that the potential benefits of the Merger outweighed the risks and uncertainties of the Merger. Accordingly, the XOMA Royalty Board approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

In addition, the XOMA Royalty Board was aware of and considered the interests of its directors and executive officers that are different from, or in addition to, the interests of XOMA Royalty stockholders generally, as described in the section entitled “—Interests of XOMA Royalty’s Directors and Executive Officers in the Merger.”

The foregoing discussion of the information and factors that the XOMA Royalty Board considered is not intended to be exhaustive, but rather is meant to include the material factors that the XOMA Royalty Board considered. The XOMA Royalty Board collectively reached the conclusion to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement in light of the various factors described above and other factors that the members of the XOMA Royalty Board believed were appropriate. In view of the complexity and wide variety of factors, both positive and negative, that the XOMA Royalty Board considered in connection with its evaluation of the Merger, the XOMA Royalty Board did not find it practical, and did not attempt, to quantify, rank or otherwise assign relative or specific weights or values to any of the factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the XOMA Royalty Board. In considering the factors discussed above, individual directors may have given different weights to different factors.

Certain Unaudited Prospective Financial Information

XOMA Royalty does not, as a matter of course, publicly disclose long-term forecasts or projections as to future performance, revenues, earnings, financial condition or other results due to, among other reasons, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized. However, XOMA Royalty’s management, in connection with the proposed Merger and its consideration and evaluation of the Merger, prepared and provided to the XOMA Royalty Board and Leerink Partners, XOMA Royalty’s financial advisor, certain unaudited prospective financial information (the “XOMA Royalty Management Projections” or the “Internal Data”). The XOMA Royalty Management Projections were prepared for use on a standalone basis and do not give effect to the Merger, including any changes that may be implemented after the consummation of the Merger, including the costs incurred in connection with the Merger or any synergies or dis-synergies. The XOMA Royalty Management Projections also do not account for any proceeds that may be received by the Company or its stockholders through the CVRs to be distributed in connection with the CVR Spin.

The XOMA Royalty Management Projections are included in this proxy statement/prospectus solely to give XOMA Royalty stockholders access to the financial projections that were made available to the XOMA Royalty Board and Leerink Partners in connection with their respective evaluations of the Merger, and are not included in this proxy statement/prospectus in order to induce any XOMA Royalty stockholder to vote in favor of the Merger Agreement Proposal or any of the other proposals to be voted on at the Special Meeting.

 

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The XOMA Royalty Management Projections were not prepared with a view toward public disclosure or with a view toward compliance with GAAP, published guidelines of the SEC regarding projections and the use of non-GAAP financial measures, or the guidelines established by the American Institute of Certified Public Accountants (“AICPA”) for preparation and presentation of prospective financial information. Neither XOMA Royalty’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the XOMA Royalty Management Projections contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the XOMA Royalty Management Projections.

The XOMA Royalty Management Projections reflect estimates and assumptions made by XOMA Royalty management with respect to, among other things, risk-based adjustments reflecting the royalty, milestone and other payments XOMA Royalty may receive; the achievement of regulatory and developmental milestones and product sales by XOMA Royalty’s licensees and royalty agreement counterparties and their licensees; potential product sales or competition, patent expirations, exclusivity terms, or license terms or terminations for the products underlying XOMA Royalty’s portfolio; assumptions with respect to operating expenses, tax rate, and change in net working capital; the impact of U.S. federal net operating loss carryforwards; and general business, economic, regulatory and other market and financial conditions of future events, all of which are difficult to predict and many of which are outside of XOMA Royalty’s control.

The XOMA Royalty Management Projections are subjective in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. XOMA Royalty makes no representation to any person regarding the ultimate performance of XOMA Royalty compared to the information contained in the XOMA Royalty Management Projections. XOMA Royalty cautions stockholders that the XOMA Royalty Management Projections are forward-looking statements that are inherently subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict, and many of which are beyond XOMA Royalty’s control. There can be no assurance that the projected results will be realized or that actual results will not be significantly higher or lower than projected. The XOMA Royalty Management Projections cover multiple years, and such information by its nature becomes subject to greater uncertainty with each successive year. The assumptions and estimates underlying the XOMA Royalty Management Projections may not be realized and are inherently subject to significant business, economic, competitive, industry, regulatory, market, legal and financial uncertainties and contingencies, many of which are beyond XOMA Royalty’s control. Some or all of the assumptions that have been made regarding, among other things, the timing of certain occurrences or planned products or services, may have changed since the date the XOMA Royalty Management Projections were prepared. In addition, the XOMA Royalty Management Projections may be affected by XOMA Royalty’s ability to achieve strategic goals, objectives and targets over the applicable periods.

The inclusion of the XOMA Royalty Management Projections in this proxy statement/prospectus should not be regarded as an indication that XOMA Royalty, XOMA Royalty’s advisors, or any other person considered, or now considers, such projections to be a guarantee regarding future performance or a prediction of future events, and the XOMA Royalty Management Projections should not be relied upon as such. None of XOMA Royalty, XOMA Royalty’s advisors or any of their respective affiliates, officers, directors, partners, advisors or representatives can give any assurance that actual results will not differ from the XOMA Royalty Management Projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the XOMA Royalty Management Projections to reflect circumstances existing after the date such projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the XOMA Royalty Management Projections are shown to be in error. XOMA Royalty does not intend to make publicly available any update or other revision to the XOMA Royalty Management Projections, except to the extent required by applicable law. None of XOMA Royalty, XOMA Royalty’s advisors or any other person has made or makes any representation to any stockholder of XOMA Royalty or other person regarding the ultimate performance of XOMA Royalty compared to the information contained in the XOMA Royalty Management Projections.

 

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The XOMA Royalty Management Projections contain non-GAAP financial measures. XOMA Royalty’s management believed these non-GAAP financial measures were useful because they were used in its internal planning process and provided an additional metric by which XOMA Royalty’s financial performance could be evaluated. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-GAAP financial measures used by XOMA Royalty may not be comparable to similarly titled measures used by other companies.

In light of the foregoing factors and the uncertainties inherent in the XOMA Royalty Management Projections, XOMA Royalty stockholders are cautioned not to place undue, if any, reliance on the XOMA Royalty Management Projections. See also “Cautionary Statement Regarding Forward-Looking Statements.”

The following table sets forth the XOMA Royalty Management Projections provided to the XOMA Royalty Board in connection with its evaluation of the Merger, which were approved by the XOMA Royalty Board for use by Leerink Partners in its financial analyses in connection with rendering its fairness opinion to the XOMA Royalty Board.

XOMA Royalty Management Projections⁽¹⁾

 

		2026E				2027E				2028E				2029E				2030E				2031E				2032E				2033E				2034E				2035E
Revenue		$	75			$	83			$	113			$	109			$	145			$	172			$	189			$	193			$	208			$	206
Operating Income(2)		$	50			$	57			$	86			$	80			$	115			$	141			$	157			$	159			$	173			$	168
Unlevered Free Cash Flow(3)		$	38			$	55			$	80			$	78			$	103			$	128			$	145			$	136			$	133			$	133

 

		2036E				2037E				2038E				2039E				2040E				2041E				2042E				2043E				2044E				2045E
Revenue		$	175			$	162			$	142			$	111			$	91			$	61			$	46			$	33			$	23			$	13
Operating Income(2)		$	158			$	146			$	128			$	100			$	82			$	55			$	41			$	30			$	21			$	12
Unlevered Free Cash Flow(3)		$	129			$	117			$	103			$	82			$	66			$	47			$	34			$	25			$	18			$	11

 

(1)	Risk-adjusted based on the Company’s management estimates of probabilities of success.

(2)	Operating Income is calculated as Revenue, less (i) stock-based compensation treated as a cash expense, less (ii) other operating expenses.

(3)	Unlevered Free Cash Flow is a non-GAAP financial measure calculated as Operating Income (as defined above), less (i) estimated taxes (if profitable and including the impact of NOL usage), less (ii) increases in net working capital.

Opinion of Leerink Partners, XOMA Royalty’s Lead Financial Advisor

Introduction

The Company retained Leerink Partners as its lead financial advisor in connection with the transactions contemplated by the Merger Agreement (which we refer to in this section as the “Transaction”). In connection with this engagement, the XOMA Royalty Board requested that Leerink Partners evaluate the fairness, from a financial point of view, to the holders of Shares (other than the holders of Excluded Shares) of the Closing Consideration proposed to be paid to such holders pursuant to the terms of the Merger Agreement. For purposes of this section, “Excluded Shares” means Shares held in the treasury of HoldCo or owned, directly or indirectly, by Parent, Merger Sub, HoldCo or any wholly owned Subsidiary of HoldCo immediately prior to the Effective Time, and Shares, if any, outstanding immediately prior to the Effective Time that are held by any person who is entitled to assert any right of dissent or make any demand for appraisal of such Shares pursuant to applicable Nevada law and who complies in all respects with applicable Nevada law.

On April 26, 2026, Leerink Partners rendered to the XOMA Royalty Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated the same date that, as of such date and based upon

 

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and subject to the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, the Closing Amount proposed to be paid to the holders of Shares (other than Excluded Shares) pursuant to the terms of the Merger Agreement was fair, from a financial point of view, to such holders.

The full text of the written opinion of Leerink Partners, dated April 26, 2026, which describes the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion, is attached to this proxy statement/prospectus as Annex D and is incorporated herein by reference. The summary of the written opinion of Leerink Partners set forth below is qualified in its entirety by the full text of the written opinion attached hereto as Annex D. Leerink Partners’ financial advisory services and opinion were provided for the information and assistance of the XOMA Royalty Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of the XOMA Royalty Board’s consideration of the Transaction. The opinion of Leerink Partners addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of Shares (other than Excluded Shares) of the Closing Amount proposed to be paid to such holders pursuant to the terms of the Merger Agreement. The opinion of Leerink Partners did not address any other term or aspect of the Transaction, or the CVRs, and does not constitute a recommendation to any stockholder of the Company as to whether or how such stockholder should vote or otherwise act with respect to the Merger or any other matter.

The full text of Leerink Partners’ written opinion should be read carefully in its entirety for a description of the assumptions made, and the qualifications and limitations upon the review undertaken by Leerink Partners in preparing its opinion.

In connection with rendering the opinion described below and performing its related financial analyses, Leerink Partners reviewed, among other things:

 

•

a draft dated April 26, 2026 of the Merger Agreement, as provided to Leerink Partners by the Company;

 

•

the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed by the Company with the SEC;

 

•

certain Current Reports on Form 8-K, as filed by the Company with, or furnished by the Company to, the SEC;

 

•

certain publicly available research analyst reports for the Company;

 

•

certain other communications from the Company to its stockholders; and

 

•

certain financial forecasts, analyses and projections relating to the Company prepared by management of the Company, as furnished to, and approved for use by, Leerink Partners for purposes of its analysis, which are referred to in this summary of the Leerink Partners opinion as the “Internal Data” (for additional information, see “—Certain Unaudited Prospective Financial Information”).

Leerink Partners also conducted discussions with members of the senior management and representatives of the Company regarding the Internal Data. In addition, Leerink Partners reviewed publicly available financial and stock market data for the Company and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Leerink Partners deemed relevant. Leerink Partners also conducted such other financial studies and analyses and took into account such other information as Leerink Partners deemed appropriate.

Leerink Partners assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Leerink Partners for purposes of its opinion and, with the Company’s consent, Leerink Partners relied upon such information as being complete and accurate. In that regard, Leerink Partners assumed,

 

57

at the Company’s direction, that the Internal Data had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby and Leerink Partners relied, at the Company’s direction, on the Internal Data for purposes of Leerink Partners’ analysis and opinion. Leerink Partners expressed no view or opinion as to the Internal Data or the assumptions on which it was based. In addition, at the Company’s direction, Leerink Partners did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company, nor was Leerink Partners furnished with any such evaluation or appraisal, and Leerink Partners was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. Furthermore, for purposes of its opinion, at the Company’s direction, Leerink Partners ascribed no value to the CVRs issuable pursuant to the Merger Agreement.

Leerink Partners assumed, at the Company’s direction, that the final executed Merger Agreement would not differ in any respect material to Leerink Partners’ analysis or opinion from the last draft of the Merger Agreement reviewed by Leerink Partners. Leerink Partners also assumed, at the Company’s direction, that the representations and warranties made by the Company and Parent and Merger Sub in the Merger Agreement were and would continue to be true and correct in all respects material to Leerink Partners’ analysis. Furthermore, Leerink Partners assumed, at the Company’s direction, that the Transaction would be consummated on the terms set forth in the Merger Agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Leerink Partners’ analysis or opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change would be imposed, the effect of which would be material to Leerink Partners’ analysis or opinion. Leerink Partners did not evaluate and did not express any opinion as to the solvency or fair value of the Company, or the ability of the Company to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Leerink Partners is not a legal, regulatory, tax or accounting advisor, and Leerink Partners expressed no opinion as to any legal, regulatory, tax or accounting matters.

The opinion of Leerink Partners expressed no view as to, and did not address, the Company’s underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. The opinion of Leerink Partners was limited to and addressed only the fairness, from a financial point of view, as of the date of the written opinion of Leerink Partners, to the holders of the Shares (other than Excluded Shares) of the Closing Amount proposed to be paid to such holders pursuant to the terms of the Merger Agreement. Leerink Partners was not asked to, and Leerink Partners did not, express any view on, and its opinion did not address, any other term or aspect of the Merger Agreement, the Holding Company Reorganization, the CVRs, or any other term or aspect of the Transaction, including, without limitation, the structure or form of the Transaction, the form or any other terms of the CVRs, or any other agreements or arrangements contemplated by the Merger Agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of such transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, Leerink Partners expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons in connection with the Transaction, whether relative to the Closing Amount proposed to be paid to the holders of Shares pursuant to the terms of the Merger Agreement or otherwise. The opinion of Leerink Partners was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Leerink Partners as of, the date of its written opinion, and Leerink Partners does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of such written opinion. The opinion of Leerink Partners does not constitute a recommendation to any stockholder of the Company as to whether or how such stockholder should vote or otherwise act with respect to the Transaction or any other matter. Leerink Partners’

 

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financial advisory services and its opinion were provided for the information and assistance of the XOMA Royalty Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction.

The issuance of Leerink Partners’ opinion was approved by the Leerink Partners LLC Fairness Opinion Review Committee.

Summary of Financial Analyses by Leerink Partners LLC

The summary below of the financial analyses prepared by Leerink Partners and reviewed with the XOMA Royalty Board is not a complete description of the opinion of Leerink Partners or the underlying analyses, or of the factors considered in connection with the opinion of Leerink Partners delivered on April 26, 2026. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Leerink Partners arrived at its opinion based on the results of all analyses undertaken by it and factors assessed as a whole, and it did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Leerink Partners believes that its analyses must be considered as a whole and that selecting portions of such analyses and factors, without considering all analyses and factors, could create a misleading or incomplete view of the processes underlying such analyses and the opinion of Leerink Partners. The order of the analyses described below does not represent the relative importance or weight given to those analyses by Leerink Partners.

In its analyses, Leerink Partners considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of the Company. An evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the results of any particular analysis.

The estimates contained in the analyses of Leerink Partners and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, the analyses of Leerink Partners are inherently subject to substantial uncertainty.

Leerink Partners was not requested to, and did not, recommend or determine the specific consideration payable in the Transaction. The type and amount of consideration payable was determined through negotiations between the Company and Parent and the Company’s decision to enter into the Merger Agreement was solely that of the XOMA Royalty Board. The opinion of Leerink Partners was only one of many factors considered by the XOMA Royalty Board in its evaluation of the Transaction and should not be viewed as determinative of the views of the XOMA Royalty Board or the Company’s management with respect to the Transaction, the Closing Amount or any other aspect of the Transaction.

The following is a summary of the material financial analyses reviewed with the XOMA Royalty Board and performed by Leerink Partners in connection with its opinion, which was delivered orally to the XOMA Royalty Board on April 26, 2026 and subsequently confirmed in the written opinion of Leerink Partners, dated April 26, 2026. Although the written opinion of Leerink Partners attached hereto as Annex D and the summary set forth below do not purport to describe all work performed and information considered by Leerink Partners, all material studies and analyses performed by Leerink Partners are described herein. Future results may be different from those described and such differences may be material. For purposes of the analyses described below, Leerink Partners was directed by the Company to rely upon the Internal Data.

 

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Discounted Cash Flow Analysis

A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

Leerink Partners performed a discounted cash flow analysis of the Company based on the forecasted, risk-adjusted, after-tax unlevered free cash flows of the Company over the period beginning on April 1, 2026 and ending on December 31, 2045, which were set forth in the Internal Data as described in the section entitled “—Certain Unaudited Prospective Financial Information.” Leerink Partners adjusted for tax savings from usage of the Company’s estimated U.S. federal net operating loss carryforwards as directed by the Company’s management. These amounts were then discounted to present value using a discount rate range of 10.00% to 12.00%, which Leerink Partners determined based upon its professional expertise and judgment, and a mid-year discounting convention to discount the Company’s forecasted, risk-adjusted, after-tax unlevered free cash flows as projected by Company management to March 31, 2026. This analysis took into account an assumed net debt position as of March 31, 2026, provided by Company management, of approximately $92 million. Leerink Partners then divided the results of the foregoing calculations by the fully-diluted Shares outstanding (determined using the treasury stock method and taking into account outstanding shares of Series X Preferred Stock, outstanding in-the-money Company Stock Options, Company RSUs, Company PSUs and Company Warrants), as of April 23, 2026, as set forth in the Internal Data.

This analysis resulted in an implied per Share equity value range of approximately $32.73 to $37.26 (rounded to the nearest $0.01). Leerink Partners then compared the range to the Closing Amount of $39.00 per Share.

Other Factors Observed by Leerink Partners LLC

Leerink Partners noted for the XOMA Royalty Board certain additional factors that were not considered part of its financial analyses but were noted solely for reference and informational purposes:

 

•

Enterprise Value-to-Revenue (EV/R) Multiple. Leerink Partners reviewed the enterprise value-to-2026 estimated revenue multiples for a selected group of publicly traded companies that Leerink Partners deemed comparable, based on its experience and professional judgment, to the Company. Based on this review, Leerink Partners observed a 25th to 75th percentile range of enterprise value-to-2026 estimated revenue multiples of approximately 5.8x to 11.4x, which Leerink Partners then applied to the Company’s forecasted, risk-adjusted 2026 revenue of approximately $75 million, as provided by Company management. This analysis resulted in an implied per-share equity value reference range of approximately $18.77 to $40.26.

 

•

Analyst Price Targets Analysis. Leerink Partners reviewed stock price targets for the Shares in publicly available Wall Street research analyst reports as of April 24, 2026, which indicated low and high price targets for the Company ranging from $50.00 to $97.00 per Share.

 

•

Historical Stock Price Trading Analysis. Leerink Partners reviewed historical trading prices of the Shares during the 52-week period ended April 24, 2026, which reflected low to high closing prices for the Shares during such period of $22.89 to $40.13 per Share.

Miscellaneous

Leerink Partners is a full-service securities firm engaged in securities trading and brokerage activities as well as investment banking and financial advisory services. Leerink Partners has in the past provided certain investment banking services to the Company and its affiliates and Parent and its affiliates unrelated to the Transaction. In the past two years, Leerink Partners has served as sales agent under the Company’s at-the-market

 

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sales agreement since October 2025 and received fees less than $10,000 thereunder, and, with respect to Parent, as a joint bookrunner in connection with its Rule 144A offering of Convertible Senior Notes in August 2025, for which Leerink Partners received fees of $1,100,000, and as sales agent under its at-the-market sales agreement entered into in March 2026, for which Leerink Partners has not received any fees. In the ordinary course of business, Leerink Partners and its affiliates may, in the future, provide investment banking services to the Company, Parent or their respective affiliates and would expect to receive customary fees for the rendering of such services. In the ordinary course of Leerink Partners’ trading and brokerage activities, Leerink Partners has in the past held and may in the future hold positions, for Leerink Partners’ own account or the accounts of its customers, in equity, debt or other securities of the Company, Parent or their respective affiliates. Consistent with applicable legal and regulatory requirements, Leerink Partners has adopted policies and procedures to establish and maintain the independence of its research department and personnel. As a result, Leerink Partners’ research analysts may hold views, make statements or investment recommendations and/or publish research reports with respect to the Company, Parent and the Transaction and other participants in the Transaction that differ from the views of Leerink Partners’ investment banking personnel.

The XOMA Royalty Board selected Leerink Partners as a financial advisor in connection with the Transaction based on Leerink Partners’ longstanding relationship and familiarity with the Company and its business, as well as Leerink Partners’ experience and expertise in the pharmaceutical industry. Leerink Partners is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transaction.

In connection with Leerink Partners’ services as a financial advisor to the Company, the Company has agreed to pay Leerink Partners an aggregate fee estimated as of the announcement of the Merger Agreement to be approximately $18.4 million, $1.0 million of which became payable upon the rendering of Leerink Partners’ opinion, and the remainder of which is payable contingent upon consummation of the Transaction. In addition, the Company has agreed to reimburse certain of Leerink Partners’ expenses arising, and to indemnify Leerink Partners against certain liabilities that may arise, out of Leerink Partners’ engagement.

Information regarding the terms of Leerink Partners’ engagement as the Company’s financial advisor is also set forth below under the caption entitled “—Background of the Merger.”

Interests of XOMA Royalty’s Directors and Executive Officers in the Merger

In considering the recommendations of the XOMA Royalty Board, XOMA Royalty stockholders should be aware that XOMA Royalty directors and executive officers may have interests in the Merger, including financial interests, which may be different from, or in addition to, the interests of XOMA Royalty stockholders generally. These interests are described in more detail below and, with respect to XOMA Royalty’s named executive officers, are quantified under “—Quantification of Payments and Benefits to XOMA Royalty Named Executive Officers,” of this proxy statement/prospectus. The XOMA Royalty Board was aware of and considered these interests, among other matters, in reaching its determination that the transactions contemplated by the Merger Agreement, including the Merger, were fair to and in the best interests of XOMA Royalty and its stockholders, approving and declaring advisable the merger agreement and the transactions contemplated thereby, and recommending that XOMA Royalty stockholders approve the Merger Agreement Proposal. See “—Background of the Merger” and “—Recommendation of the XOMA Royalty Board of Directors; XOMA Royalty’s Reasons for the Merger.”

Executive Officers

For purposes of this disclosure, XOMA Royalty’s current “named executive officers” are:

 

•

Owen Hughes, Chief Executive Officer; and

 

•

Bradley Sitko, Chief Investment Officer.

 

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Also, for the purpose of this disclosure, XOMA Royalty’s executive officers include the named executive officers identified above as well as Maricel Montano, Chief Legal Officer, and Jeffrey Trigilio, Chief Financial Officer, and XOMA Royalty’s directors include Jack L. Wyszomierski, Heather L. Franklin, Natasha Hernday, Barbara Kosacz, Joseph M. Limber and Matthew Perry.

Certain other individuals who served since the beginning of XOMA Royalty’s last fiscal year would be considered named executive officers, executive officers or non-employee directors for purposes of this disclosure, but as former employees or directors of XOMA Royalty, they are not entitled to the payments and benefits described below for the named executive officers, executive officers and non-employee directors in connection with the Merger, excluding Thomas M. Burns, who remains entitled to receive certain payments in connection with the Merger pursuant to the separation and consulting agreement entered into by and between XOMA Royalty and Mr. Burns as disclosed in the section titled, “—Quantification of Payments and Benefits to XOMA Royalty Named Executive Officers.” None of such former named executive officers, executive officers or directors (excluding Mr. Burns) are receiving any compensation in connection with the Merger in such capacities. Accordingly, such former named executive officers, executive officers and non-employee directors are not included in this disclosure (excluding Mr. Burns).

Treatment of Company Equity Awards

The tables below summarize the number of Company Options, Company RSUs, and Company PSUs held by XOMA Royalty executive officers and directors as of May 18, 2026, and the estimated aggregate value of such XOMA Royalty equity awards, calculated as $41.23 per share, based on the Closing Price of $39.00 and the implied CVR value of $2.23 per share. The implied CVR value is calculated based the excess of the average closing market price of XOMA Royalty common stock over the first five (5) business days following the public announcement of the merger on April 27, 2026 over $39.00.

Company Options

Each Company Option, whether unvested or vested immediately prior to the Closing, that has an exercise price per share of XOMA Royalty common stock that is less than the value of the Merger Consideration (with the fair market value of a CVR determined as of the Closing Date) (each, a “Terminating Company Stock Option”) that is then-outstanding will become fully vested, cancelled, and converted into the right to receive (A) an amount in cash (without interest, and subject to deduction for required tax withholding) equal to the product of (i) the excess of $39.00 over the exercise price per share of XOMA Royalty common stock subject to such Terminating Company Stock Option and (ii) the number of shares of XOMA Royalty common stock subject to such Terminating Company Stock Option (such amount, the “Terminating Company Stock Option Cash Consideration”), and (B) one CVR for each share of XOMA Royalty common stock subject to such Terminating Company Stock Option.

 

Name		Number of Vested Terminating Company Stock Options (#)				Estimated Value of Vested Terminating Company Stock Options ($)(1)				Number of Unvested Terminating Company Stock Options (#)				Estimated Value of Unvested Terminating Company Stock Options ($)(1)
Executive Officers
Owen Hughes			175,000			$	3,099,250				—				—
Bradley Sitko			458,333			$	7,982,080				91,667			$	1,596,420
Jeffrey Trigilio			—				—				—				—
Maricel Montano			—				—				—				—

 

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Name		Number of Vested Terminating Company Stock Options (#)				Estimated Value of Vested Terminating Company Stock Options ($)(1)				Number of Unvested Terminating Company Stock Options (#)				Estimated Value of Unvested Terminating Company Stock Options ($)(1)
Directors
Jack L. Wyszomierski			54,801			$	1,242,432				—				—
Heather L. Franklin			47,008			$	759,161				—				—
Natasha Hernday			43,196			$	844,934				—				—
Barbara Kosacz			69,125			$	1,544,281				—				—
Joseph M. Limber			73,672			$	1,550,447				828			$	13,339
Matthew Perry			59,657			$	1,449,699				—				—

 

(1)

Values shown include the implied value of a CVR of $2.23 per share based on the average closing market price of XOMA Royalty common stock over the first five (5) business days following the public announcement of the merger on April 27, 2026, over $39.00. The actual value of the Terminating Company Stock Options will be determined based on the fair market value of a CVR calculated as of the Closing Date.

 

Name		Number of Vested Terminating Company Stock Options (#)				Number of Unvested Terminating Company Stock Options (#)				Exercise Price ($)
Executive Officers
Owen Hughes			100,000				—			$	18.66
			75,000				—			$	30.00
Bradley Sitko			250,000				50,000			$	18.66
			208,333				41,667			$	30.00
Jeffrey Trigilio			—				—				—
			—				—				—
Maricel Montano			—				—				—
Directors							—
Jack L. Wyszomierski			8,000				—			$	4.03
			2,366				—			$	19.40
			5,052				—			$	25.16
			8,167				—			$	15.59
			6,152				—			$	21.27
			5,101				—			$	31.04
			8,996				—			$	17.86
			10,967				—			$	21.39
Heather L. Franklin			17,282				—			$	31.39
			8,996				—			$	17.86
			10,967				—			$	21.39
			9,763				—			$	24.71
Natasha Hernday			13,251				—			$	19.76
			5,101				—			$	31.04
			8,996				—			$	17.86
			10,967				—			$	21.39
			4,881				—			$	24.71
Barbara Kosacz			19,979				—			$	12.65
			8,167				—			$	15.59
			6,152				—			$	21.27
			5,101				—			$	31.04
			8,996				—			$	17.86

 

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Name		Number of Vested Terminating Company Stock Options (#)				Number of Unvested Terminating Company Stock Options (#)				Exercise Price ($)
			10,967				—			$	21.39
			9,763				—			$	24.71
Joseph M. Limber			8,000				—			$	4.03
			2,366				—			$	19.40
			5,052				—			$	25.16
			8,167				—			$	15.59
			6,152				—			$	21.27
			5,101				—			$	31.04
			8,996				—			$	17.86
			10,967				—			$	21.39
			9,763				—			$	24.71
			9,108				828			$	25.12
Matthew Perry			15,222				—			$	4.67
			5,052				—			$	25.16
			8,167				—			$	15.59
			6,152				—			$	21.27
			5,101				—			$	31.04
			8,996				—			$	17.86
			10,967				—			$	21.39
			15,222				—			$	4.67

Company RSUs and Company PSUs

Each Company RSU (other than Company RSUs held by the Company’s non-employee directors) including each Company PSU that as of immediately prior to the Closing has achieved the “Performance-Requirement” (as the term “Performance-Requirement” is defined and set forth in the applicable award agreement governing such Company PSU) (each, a “Terminating Company RSU”) that is then-outstanding will automatically become fully vested, cancelled and converted into the right to receive (A) an amount in cash (without interest, and subject to deduction for any required tax withholding) equal to the product of (i) the number of shares of XOMA Royalty common stock subject to such Terminating Company RSU and (ii) the Closing Price of $39.00 (such amount, the “Terminating Company RSU Cash Consideration”), and (B) one CVR for each share of XOMA Royalty common stock subject to such Terminating Company RSU.

Each Company PSU that as of immediately prior to the Closing is not treated as a Terminating Company RSU as described above will be automatically converted into and substituted with a restricted stock unit award (each, a “Converted PSU”) with respect to a number of shares of XOMA Royalty common stock equal to either (x) for each Company PSU granted on or after March 1, 2026, the excess of (A) 100% of the “Target Shares” (as the term “Target Shares” is defined and set forth in the applicable award agreement governing such Company PSU) underlying such Company PSU over (B) the number of “Target Shares” as to which, as of immediately prior to the Closing, the “Performance-Requirement” has been achieved, or (y) for each Company PSU granted prior to March 1, 2026, the excess of (A) the percentage of the “Target Shares” underlying such Company PSU as to which the “Performance-Requirement” would be satisfied if the “Closing Price” (as defined in the applicable award agreement governing such Company PSU) were equal to $39.00 per share over (B) the number of “Target Shares” as of immediately prior to the Closing, the “Performance-Requirement” has been achieved. All Company PSUs granted prior to March 1, 2026 will be deemed to have achieved any “Performance-Requirement” that is equal to or less than $39.00 per share. Each Converted PSU will be cancelled and converted into the right to receive (A) an amount in cash (without interest, and subject to deduction for any required tax withholding) equal to the product of (i) the number of shares of XOMA Royalty common stock subject to such Converted PSU and (ii) the Closing Price of $39.00 (such amount, the “Converted PSU Cash Consideration”), and (B) one CVR for each share of XOMA Royalty common stock subject to such Converted PSU.

 

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Each Company PSU that does not constitute a Terminating Company RSU or become converted into a Converted PSU (each, an “Untriggered PSU”) that is outstanding as of immediately prior to the Closing (including pursuant to any extension approved by the XOMA Royalty Board or any committee thereof) will be cancelled in exchange for one CVR with respect to each share of XOMA Royalty common stock subject to such Untriggered PSU.

 

Name		Number of Company RSUs (#)				Estimated Value of Company RSUs ($)(1)				Number of Shares of Company PSUs (#)(2)				Estimated Value of Shares of Company PSUs ($)(1)				Number of Untriggered PSUs (#)(3)				Estimated Value of Untriggered PSUs ($)(1)
Executive Officers
Owen Hughes			82,428			$	3,398,506				220,222			$	9,079,753				28,737			$	64,084
Bradley Sitko			59,402			$	2,449,144				54,534			$	2,248,437				10,066			$	22,447
Jeffrey Trigilio			90,000			$	3,710,700				143,924			$	5,933,987				9,000			$	20,070
Maricel Montano			26,289			$	1,083,895				45,941			$	1,894,147				2,449			$	5,461
Directors
Jack L. Wyszomierski			5,971			$	246,184				—				—				—				—
Heather L. Franklin			5,971			$	246,184				—				—				—				—
Natasha Hernday			5,971			$	246,184				—				—				—				—
Barbara Kosacz			5,971			$	246,184				—				—				—				—
Joseph M. Limber			—				—				—				—				—				—
Matthew Perry			5,971			$	246,184				—				—				—				—

 

(1)

Values shown include the implied value of a CVR of $2.23 per share based on the average closing market price of XOMA Royalty common stock over the first five (5) business days following the public announcement of the merger on April 27, 2026, over $39. The actual values of such equity awards will be determined based on the fair market value of a CVR calculated as of the Closing Date.

(2)

This includes Company PSUs for which the performance criteria have been achieved as of May 18, 2026 (which are considered Terminating Company RSUs) and Company PSUs that will become Converted PSUs taking into account stock price performance through May 18, 2026. The number of Company PSUs for awards granted on or after March 1, 2026, were determined based on the target number of shares, and the number of Company PSUs for awards granted prior to March 1, 2026, were determined based on performance achieved based on the $39 per share merger consideration.

(3)	This includes only Company PSUs that will become Untriggered PSUs taking into account stock price performance through May 18, 2026.

Severance and Change in Control Policy

Under the employment agreements with each of the XOMA Royalty executive officers other than the named executive officers, if any executive officer is terminated by the Company without “cause” or as a result of a resignation for “good reason” (collectively, a “CIC Involuntary Termination”) during the period beginning two months before and ending 12 months after a change in control of the Company, the applicable individual will, subject to the execution of a release in favor of the Company, receive the following severance payments and benefits: (i) a lump sum cash severance payment equal to the product of (x) 1.5 and (y) the sum of the applicable executive’s annual base salary and target annual bonus for the year of termination; (ii) any earned but unpaid annual bonus for the preceding year; (iii) accelerated vesting of 100% of outstanding time-based equity awards, with the post-termination exercise period of any stock options extended for 60 months (or through the remainder of the original maximum term); (iv) accelerated vesting of a pro-rated portion of outstanding performance-based

 

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awards, based on a good faith determination by the Board or a committee thereof; (v) subsidized continued health coverage for up to 18 months; and (vi) 12 months of outplacement services, not to exceed $15,000.

 

Name		Cash Severance ($)				COBRA Benefits ($)				Total ($)(1)
Jeffrey Trigilio			1,081,500				5,236				1,086,736
Maricel Montano			1,018,500				68,286				1,086,786

 

(1)	No amounts were estimated for clauses (iii) and (iv) above because all equity awards are being extinguished at closing.

 

Name		Outplacement Benefits ($)
Jeffrey Trigilio			15,000
Maricel Montano			15,000

Gross-Up Payments

None of XOMA’s executive officers and non-employee directors are entitled to any tax gross-ups or tax equalization payments.

Quantification of Payments and Benefits to XOMA Royalty Named Executive Officers

Change in Control Payments and Benefits

The following information, table and the related footnotes present information about the compensation payable to XOMA Royalty named executive officers in connection with the mergers.

Under the employment agreements with Messrs. Hughes and Sitko, if either Mr. Hughes or Mr. Sitko is terminated by the Company without “cause” or as a result of a resignation for “good reason” during the period beginning two months before and ending 12 months after a change in control of the Company, the applicable individual will, subject to the execution of a release in favor of the Company, receive the following severance payments and benefits: (i) a lump sum cash severance payment equal to the product of (x) 2, for Mr. Hughes, or 1.5, for Mr. Sitko, and (y) the sum of the named executive officer’s annual base salary and target annual bonus for the year of termination, as applicable; (ii) any earned but unpaid annual bonus for the preceding year; (iii) accelerated vesting of 100% of outstanding time-based equity awards, with the post-termination exercise period of any stock options extended for 60 months (or through the remainder of the original maximum term); (iv) accelerated vesting of a pro-rated portion of outstanding performance-based awards, based on actual performance through the date of such termination; (v) subsidized continued health coverage for up to 24 months for Mr. Hughes, or 18 months for Mr. Sitko; and (vi) 12 months of outplacement services, not to exceed $15,000.

As used in the named executive officers’ employment agreements:

 

•

“Cause” means (i) willful material fraud or material dishonesty in connection with the employee’s performance under the agreement; (ii) material breach of the agreement or of XOMA Royalty’s Code of Ethics; (iii) misappropriation of a material business opportunity of XOMA Royalty; (iv) misappropriation of any XOMA Royalty funds or property; or (v) conviction of, or the entering of a plea of guilty or no contest with respect to, a felony. XOMA Royalty shall first have given the employee written notice stating with specificity the reason for the termination (“Breach”) and (ii) if such Breach is capable of cure or remedy, the employee will have a period of thirty (30) days after the notice is given to remedy the Breach.

As used in Mr. Hughes’s employment agreement:

 

•

“Good Reason” means, without his prior express written consent, any of the following events: (i) a reduction in the employee’s target bonus unless consistent to target bonus reductions for all other

 

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members of XOMA Royalty’s senior management team, (ii) a reduction in the employee’s base salary by more than 10%; (iii) a material reduction in the employee’s title or duties (including responsibilities and/or authorities); or (iv) any other material breach of the agreement. In order for the employee to resign for Good Reason, each of the following requirements must be met: (A) the employee must provide written notice to the XOMA Royalty Board within ninety (90) days after the occurrence of the event giving rise to Good Reason setting forth the basis for the employee’s resignation, (B) the employee must allow XOMA Royalty at least thirty (30) days from receipt of such written notice to cure such event, (C) such event is not reasonably cured by XOMA Royalty within such thirty (30) day period (the “Cure Period”), and (D) the employee must resign from all positions the employee then holds with XOMA Royalty not later than thirty (30) days after the expiration of the Cure Period.

As used in Mr. Sitko’s employment agreement:

 

•

“Good Reason” means, without his prior express written consent, any of the following events: (i) a reduction in the employee’s target bonus unless consistent to target bonus reductions for all other members of XOMA Royalty’s senior management team, (ii) a reduction in the employee’s base salary or target bonus, in each case, by more than 10%; (iii) a material reduction in the employee’s title or duties (including responsibilities and/or authorities); (iv) a required relocation of the employee’s principal place of employment to a location outside of the New York City metropolitan area; or (v) any other material breach of the agreement. In order for the employee to resign for Good Reason, each of the following requirements must be met: (A) the employee must provide written notice to the XOMA Royalty Board within ninety (90) days after the occurrence of the event giving rise to Good Reason setting forth the basis for the employee’s resignation, (B) the employee must allow XOMA Royalty at least thirty (30) days from receipt of such written notice to cure such event, (C) such event is not reasonably cured by XOMA Royalty within such thirty (30) day period (the “Cure Period”), and (D) the employee must resign from all positions the employee then holds with XOMA Royalty not later than thirty (30) days after the expiration of the Cure Period.

Golden Parachute Compensation

 

Name(1)		Cash ($)(2)				Equity ($)(3)				Perquisites/Benefits ($)(4)				Total ($)
Owen Hughes			2,378,679				9,609,158				129,941				12,117,778
Bradley Sitko			1,330,182				6,178,122				90,836				7,599,141
Thomas M. Burns			—				472,280				—				472,280

 

(1)

Named Executive Officers. This table includes Thomas M. Burns, a named executive officer, who stepped down from his position as Senior Vice President, Finance and Chief Financial Officer of the Company effective January 12, 2026, and whose employment was terminated on January 15, 2026 (the “Separation Date”). Pursuant to the separation and consulting agreement and general release of claims by and between XOMA Royalty and Mr. Burns, he will receive (i) the Converted PSU Cash Consideration in exchange for his Converted PSUs and (ii) the Terminating Company RSU Cash Consideration in exchange for his Terminating Company RSUs for which the stock price hurdle was previously achieved and were fully vested as of the Separation Date, in each case, treated on the same basis as all other holders of Company Equity Awards.

 

(2)

Cash Severance. These amounts shown reflect the cash severance payable under the employment agreements with Messrs. Hughes and Sitko as described under “—Change in Control Payments and Benefits” above in the event of a CIC Involuntary Termination. Such cash severance is “double-trigger,” which means that either Mr. Hughes or Mr. Sitko must experience a qualifying termination during the period beginning two months before and ending 12 months after a change in control of the Company in order to receive the cash severance. Details of the cash payments are shown in the following supplemental

 

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table. The bonus amounts do not reflect the value of any earned but unpaid bonuses as those amounts depend on the date of termination and are unknown at this time.

 

Name		Cash Severance ($)				Bonus ($)				Cash Total ($)
Owen Hughes			1,486,674				892,004				2,378,679
Bradley Sitko			886,788				443,394				1,330,182

 

(3)

Equity. These amounts shown reflect the estimated value of the equity acceleration under the employment agreements with Messrs. Hughes and Sitko as described under “—Change in Control Payments and Benefits” above in the event of a CIC Involuntary Termination, subject to the terms and conditions of such outstanding equity awards under the Merger Agreement as described under “—Treatment of Company Equity Awards” above. In connection with the Merger Agreement, and the transactions contemplated therein, and pursuant to that certain separation and consulting agreement and general release of claims by and between XOMA Royalty and Mr. Burns, Mr. Burns will receive (i) the Converted PSU Cash Consideration in exchange for his Converted PSUs and (ii) the Terminating Company RSU Cash Consideration in exchange for his Terminating Company RSUs for which the stock price hurdle was previously achieved and were fully vested as of the Separation Date, in each case, treated on the same basis as all other holders of Company Equity Awards. Such payments are considered “single-trigger,” and are payable upon a change in control of the Company.

 

Name		Value of Company RSUs ($)(a)				Value of Company PSUs ($)(a)				Value of Unvested Company Stock Options ($)(a)				Value of Untriggered PSUs ($)(a)
Owen Hughes			3,398,506				6,146,568				—				64,084
Bradley Sitko			2,449,144				2,110,110				1,596,420				22,447
Thomas M. Burns			—				450,933				—				21,348

 

(a)	Values shown include the implied value of a CVR of $2.23 per share based on the average closing market price of XOMA Royalty common stock over the first five (5) business days following the public announcement of the merger on April 27, 2026, over $39.

 

(4)

Perquisites/Benefits. These amounts shown reflect the estimated value of perquisites and benefits payable or provided under the employment agreements with Messrs. Hughes and Sitko as described under “—Change in Control Payments and Benefits” above in the event of a CIC Involuntary Termination. These amounts reflect (i) the estimated cost of continued medical coverage at no cost to Mr. Hughes for up to 24 months and Mr. Sitko for up to 18 months and (ii) maximum cost permitted for outplacement services.

 

Name		COBRA Benefits ($)				Outplacement Benefits ($)
Owen Hughes			114,941				15,000
Bradley Sitko			75,836				15,000

Directors’ and Officers’ Indemnification, Exculpation and Insurance

Pursuant to the terms of the Merger Agreement, XOMA Royalty directors and officers will be entitled to certain on-going indemnification and coverage under directors’ and officers’ liability insurance policies following the mergers. For a more detailed description of the provisions of the Merger Agreement relating to director and officer indemnification, see the section titled “The Merger Agreement—Directors’ and Officers’ Indemnification, Exculpation and Insurance.”

Section 16 Matters

Prior to the Effective Time, XOMA Royalty is permitted to take such steps as may be reasonably necessary or advisable to cause dispositions of XOMA Royalty equity securities (including derivative securities) pursuant

 

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to the transactions contemplated by the Merger Agreement by each individual who is a director or officer of XOMA Royalty to be exempt under Rule 16b-3 promulgated under the Exchange Act.

Potential Future Arrangements

While, as of the date of this proxy statement/prospectus and except as described above, none of XOMA Royalty’s current directors or executive officers has entered into any agreements or arrangements with Parent or their respective affiliates regarding continued service with Parent, XOMA Royalty or their respective affiliates after the Effective Time, it is possible that XOMA Royalty, Parent or their respective affiliates may enter into employment, consulting or other arrangements with such persons in the future.

Accounting Treatment

For accounting purposes, the Holding Company Reorganization, the Asset/Liability Transfer and the XOMA Royalty LLC Conversion are expected to be accounted for as transactions among entities under common control and/or changes in legal form using carryover basis in accordance with ASC 805-50. HoldCo will be treated as the successor to XOMA Royalty, and HoldCo’s consolidated financial statements will reflect XOMA Royalty’s historical financial position and results of operations on the same basis as previously presented, except for the effects of the certain reorganization steps prior to issuing the CVRs.

Prior to issuing the CVRs, HoldCo will contribute 75 of the 100 outstanding CLAIM Units of XOMA Royalty LLC to the CVR Trust (referred to herein as the Trust Contribution) and, as additional Merger Consideration, will pay, in the form of CVRs, to the Persons entitled to receive CVRs pursuant to the Merger Agreement (referred to herein as the “CVR Payment”) the right to receive payment from the CVR Trust. Following the CVR Payment, the CVR Trust, and not HoldCo, Parent or XOMA Royalty LLC, will be the sole obligor with respect to payments, if any, on the CVRs. Because the potential proceeds from the Janssen Litigation is not currently recognized in XOMA Royalty’s financial statements, and because the CVRs are not obligations of HoldCo, Parent or XOMA Royalty LLC following the CVR Payment, HoldCo does not expect the Trust Contribution or the CVR Payment to result in recognition of a material gain, loss or liability, apart from the deconsolidation of XOMA Royalty LLC described below.

Following the CVR Payment, HoldCo expects to deconsolidate XOMA Royalty LLC in accordance with ASC 810 and to account for its retained 25% interest in the CLAIM Units as a non-consolidated equity investment in accordance with applicable GAAP.

No separate unaudited pro forma financial information has been presented to give effect to the Holding Company Reorganization, the Asset/Liability Transfer, the RemainCo Conversion, the Trust Contribution or the CVR Payment. The Holding Company Reorganization, the Asset/Liability Transfer and the RemainCo Conversion will be reflected through HoldCo’s successor/carryover presentation, and the Trust Contribution and the CVR Payment do not require separate pro forma financial information under Regulation S-X Article 11 because they do not meet the significance thresholds set forth in Rule 1-02(w).

For accounting purposes, Parent is considered to be acquiring HoldCo in the Merger. After completion of the Merger, HoldCo will be a wholly owned subsidiary of Parent and separate standalone financial statements of HoldCo are not expected to be reported.

Regulatory Approvals

For a more detailed description of the provisions of the Merger Agreement relating to regulatory approvals, see the section titled “The Merger Agreement—Regulatory Approvals; Consents.”

 

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Dividend Policy

XOMA Royalty has not paid dividends on XOMA Royalty common stock and does not anticipate paying cash dividends on XOMA Royalty common stock in the foreseeable future. Holders of shares of Series A Preferred Stock are entitled to receive, when and as declared by the XOMA Royalty Board, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 8.625% of the $25.00 liquidation preference per year (equivalent to $2.15625 per year per share). Holders of Series B Preferred Stock are entitled to receive, when and as declared by the XOMA Royalty Board, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 8.375% of the $25,000 liquidation preference per year of Series B Preferred Stock ($25.00 per depositary share, equivalent to $2,093.75 per year per share of Series B Preferred Stock or $2.09375 per year per depositary share).

U.S. Federal Securities Law Consequences

Pending the effectiveness of the registration statement on Form S-4, of which this proxy statement/prospectus forms a part, shares of HoldCo common stock issued in the Holding Company Reorganization will not be subject to any restrictions on transfer arising under the Securities Act or the Exchange Act. This proxy statement/prospectus does not cover resales of HoldCo common stock received by any person upon the completion of the Holding Company Reorganization, and no person is authorized to make any use of this proxy statement/prospectus in connection with any resale of HoldCo common stock.

The Merger Consideration consists of cash and CVRs and does not include any shares of Parent stock. Accordingly, no securities of Parent will be issued in connection with the Merger, and the Securities Act registration requirements do not apply to the Merger Consideration.

Delisting and Deregistration of XOMA Royalty Common Stock

If the Merger is completed, XOMA Royalty common stock will be delisted from the Nasdaq and deregistered under the Exchange Act, and XOMA Royalty will no longer be required to file periodic reports with the SEC with respect to XOMA Royalty common stock.

XOMA Royalty has agreed to cooperate with Parent to take, or use its reasonable best efforts to delist the XOMA Royalty common stock from the Nasdaq and to terminate XOMA Royalty’s registration under the Exchange Act after the effective time.

 

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THE MERGER AGREEMENT

The following description sets forth the principal terms of the Merger Agreement, which is attached as Annex A and is incorporated by reference into this proxy statement/prospectus. The rights and obligations of the parties are governed by the express terms and conditions of the Merger Agreement and not by this description, which is a summary by nature. This description does not purport to be complete and is qualified in its entirety by reference to the complete text of the Merger Agreement. You are encouraged to read the Merger Agreement carefully and in its entirety, as well as this proxy statement/prospectus and any documents incorporated by reference herein, before making any decisions regarding any of the proposals described in this proxy statement/prospectus. Capitalized terms used but not defined herein shall have meanings ascribed to them in the Merger Agreement. This section is intended to provide you with information regarding the terms of the Merger Agreement. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone, and you should read the information provided elsewhere in this proxy statement/prospectus and in the public filings XOMA Royalty makes with the SEC, as described in the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” beginning on page 118 of this proxy statement/prospectus.

Explanatory Note Regarding the Merger Agreement

The Agreement and Plan of Merger, dated as of April 27, 2026, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of May 16, 2026, (as it may be amended from time to time) (the “Merger Agreement”), and this summary of terms is included to provide you with information regarding the terms of the Merger Agreement. Factual disclosures about XOMA Royalty contained in this proxy statement/prospectus or in the public reports of XOMA Royalty filed with the SEC may supplement, update or modify the factual disclosures about XOMA Royalty contained in the Merger Agreement. The representations, warranties and covenants made in the Merger Agreement by XOMA Royalty, Parent and Merger Sub were qualified and subject to important limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement. In particular, in your review of the representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purpose of establishing circumstances in which a party to the Merger Agreement may have the right not to consummate the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, and were not intended by the parties to the Merger Agreement to be a characterization of the actual state of facts or condition of XOMA Royalty, Parent or Merger Sub, except as expressly stated in the Merger Agreement. The representations and warranties also may be subject to a contractual standard of materiality different from that generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by the matters contained in the confidential disclosures that XOMA Royalty and Parent each delivered in connection with the Merger Agreement, which disclosures were not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement/prospectus, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement/prospectus or in the public filings made by XOMA Royalty with the SEC.

Additional information about XOMA Royalty may be found elsewhere in this proxy statement/prospectus and in the public filings XOMA Royalty makes with the SEC. See the section titled “Where You Can Find More Information; Incorporation of Certain Information by Reference” of this proxy statement/prospectus.

Structure of the Merger; Holding Company Reorganization

Pursuant to the terms of the Merger Agreement, and following the Holding Company Reorganization (as described below), Merger Sub will merge with and into HoldCo (the “Merger”), with HoldCo as the surviving

 

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corporation (the “Surviving Corporation”), continuing as a wholly owned subsidiary of Parent. The parties have amended the Merger Agreement to add HoldCo as a party thereto in order to give effect to the Holding Company Reorganization immediately prior to the Effective Time such that Merger Sub will merge with and into HoldCo at the Effective Time.

Completion and Effectiveness of the Merger

The closing of the Merger (the “Closing”), will take place on the third business day after the satisfaction or waiver of all conditions for completion of the Merger set forth in the Merger Agreement (other than those conditions to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions), or at such other time, place and/or date as Parent and XOMA Royalty may otherwise mutually agree in writing. The date on which the Closing actually takes place is referred to herein as the “Closing Date”.

On the date of the Closing, HoldCo and Merger Sub will file articles of merger (“Articles of Merger”) with the Nevada Secretary of State as provided under the NRS. The Merger will become effective at the time of the filing of the Articles of Merger with the Nevada Secretary of State or at such later time as may be designated jointly by Parent and HoldCo and specified in the Articles of Merger. The time at which the Merger becomes effective is referred to as the “Effective Time”.

Parent and XOMA Royalty are working to complete the Merger prior to 11:59 p.m., Eastern Time, on January 26, 2027 (the “Termination Date”). It is possible that factors outside the control of both parties could result in the Merger being completed at a different time, or not at all.

Merger Consideration

At the Effective Time, by virtue of the Merger and without any further action on the part of XOMA Royalty, Parent, Merger Sub, or any stockholder of XOMA Royalty, each share of common stock, par value $0.0075 per share, of XOMA Royalty (the “Shares”), that is issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled as described below and Dissenting Shares) will be converted into the right to receive (i) $39.00 per Share in cash, without interest and subject to deduction for any required withholding tax (the “Closing Amount”), plus (ii) one contingent value right (a “CVR”), that is a contractual right to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust out of distributions, if any, made by XOMA Royalty LLC (clauses (i) and (ii) collectively, the “Merger Consideration”). At the Effective Time, all shares issued and outstanding immediately prior to the Effective Time will no longer be outstanding and will automatically be cancelled and will cease to exist, and will thereafter only represent the right to receive the Merger Consideration, without interest.

Prior to the Effective Time, XOMA Royalty will redeem all outstanding shares of Perpetual Preferred Stock (consisting of Series A Cumulative Perpetual Preferred Stock and Series B Cumulative Perpetual Preferred Stock) (the “Perpetual Preferred Redemption”), in accordance with the terms of the applicable certificate of designation governing such Perpetual Preferred Stock, including payment of all accrued and unpaid dividends thereon through the date of such redemption. From and after the consummation of the Perpetual Preferred Redemption, each share of Perpetual Preferred Stock so redeemed will be cancelled and will cease to exist, and no further consideration will be payable in respect thereof under the Merger Agreement.

Each share held in the treasury of XOMA Royalty or owned, directly or indirectly, by Parent, Merger Sub, XOMA Royalty or any wholly owned subsidiary of XOMA Royalty immediately prior to the Effective Time will automatically be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor

CVRs also will be issued in respect of certain Company Equity Awards and Company Warrants as described below in the section titled “—Treatment of Company Equity Awards and Company Warrants.”

 

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The Holding Company Reorganization

Prior to the Effective Time, XOMA Royalty will effect a holding company reorganization (the “Holding Company Reorganization”), pursuant to the applicable provisions of the NRS, including Chapter 92A thereof, whereby (a) a direct, wholly owned subsidiary of XOMA Royalty Holdings Corporation, a Nevada corporation and wholly owned subsidiary of XOMA Royalty (“HoldCo”), will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty, (b) each share of XOMA Royalty common stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of common stock of HoldCo, having the same rights, powers and preferences as such share, (c) each share of XOMA Royalty Preferred Stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of preferred stock of HoldCo, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as such share of XOMA Royalty Preferred Stock, and (d) each XOMA Royalty equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to shares of HoldCo common stock (or, as applicable, HoldCo preferred stock) on the same terms and conditions.

XOMA Royalty will not effect the Holding Company Reorganization unless HoldCo’s articles of incorporation (including the designation of each series of HoldCo preferred stock with terms substantially identical to the corresponding series of XOMA Royalty Preferred Stock) and bylaws are in form and substance reasonably acceptable to Parent. See the section titled “The Holding Company Reorganization” beginning on page 100 of this proxy statement/prospectus.

Contingent Value Rights

The Merger Agreement provides that each eligible share of XOMA Royalty common stock will be converted into the right to receive $39.00 in cash plus one CVR, and that CVRs also will be issued in respect of certain Company equity awards and Company Warrants as described under the section titled “—Treatment of Company Equity Awards and Company Warrants” in this proxy statement/prospectus. The CVRs will be governed by the CVR Agreement attached as Annex E to this proxy statement/prospectus. For a detailed description of the CVRs, including the CVR Trust structure, CLAIM Units, payment mechanics, governance arrangements, transfer restrictions, amendments and term, see the section titled “Contingent Value Rights” in this proxy statement/prospectus.

Treatment of Company Equity Awards and Company Warrants

Treatment of Company Stock Options

At the Effective Time, each Company Stock Option that has an exercise price per share of XOMA Royalty common stock that is less than the value of the Merger Consideration (with the fair market value of a CVR determined as of the Closing Date) (a “Terminating Company Stock Option”), that is outstanding immediately prior to the Effective Time shall automatically become fully vested, cancelled, and converted into the right to receive (i) an amount in cash (without interest, and subject to deduction for any required tax withholding) equal to the product of (a) the excess of the Closing Amount over the exercise price per share under such Terminating Company Stock Option and (b) the number of shares subject to such Terminating Company Stock Option (the “Terminating Company Stock Option Cash Consideration”), and (ii) one CVR for each share subject to such Terminating Company Stock Option. The Surviving Corporation shall pay to each former holder of any such Terminating Company Stock Option the Terminating Company Stock Option Cash Consideration as soon as practicable following the Effective Time (and in no event later than ten business days after the Effective Time). Any Company Stock Option that does not constitute a Terminating Company Stock Option (an “Out of the Money Option”) that is outstanding immediately prior to the Effective Time shall be automatically cancelled and no consideration shall be delivered in exchange therefor.

 

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Treatment of Company RSUs

At the Effective Time, each Company RSU granted under any Company Stock Plan (including the portion of each Company PSU as to which the applicable performance requirement has been achieved, but which has not yet been released or settled) (other than Company RSUs held by the Company’s non-employee directors) (a “Terminating Company RSU”), that is outstanding immediately prior to the Effective Time shall automatically become fully vested, cancelled and converted into the right to receive (i) an amount in cash (without interest and subject to deduction for any required tax withholding) equal to the product of (a) the number of shares subject to such Terminating Company RSU and (b) the Closing Amount (the “Terminating Company RSU Cash Consideration”), and (ii) one CVR for each share subject to such Terminating Company RSU. Parent shall cause the Surviving Corporation to pay or cause to be paid to former holders of Terminating Company RSUs the Terminating Company RSU Cash Consideration as soon as practicable following the Effective Time (and in no event later than ten business days after the Effective Time).

Treatment of Company PSUs

At the Effective Time, the portion of each Company PSU as to which the applicable performance requirement has been achieved (but which has not yet been released or settled) will be treated as a Terminating Company RSU as described above and will receive cash plus CVRs on the same terms. The portion of each Company PSU for which the performance requirement has not yet been achieved will be automatically converted into and substituted with a restricted stock unit award (a “Converted PSU”), covering a number of shares of XOMA Royalty common stock determined as follows: (x) for Company PSUs granted on or after March 1, 2026, the number of shares will equal 100% of the “Target Shares” underlying such Company PSU, less the number of Target Shares as to which the performance requirement has already been achieved; and (y) for Company PSUs granted prior to March 1, 2026, the number of shares will equal the percentage of Target Shares as to which the performance requirement would be satisfied if the “Closing Price” (as defined in the applicable award agreement) were equal to the Closing Amount, less the number of Target Shares as to which the performance requirement has already been achieved (and, for the avoidance of doubt, such Company PSUs shall in all events be deemed to have achieved any performance requirement that is equal to or less than the Closing Amount). Each Converted PSU will automatically be cancelled and converted into the right to receive (i) an amount in cash (without interest and subject to deduction for any required tax withholding) equal to the product of (a) the number of shares subject to such Converted PSU and (b) the Closing Amount (the “Converted PSU Cash Consideration”), and (ii) one CVR for each share subject to such Converted PSU. Each portion of a Company PSU that does not constitute a Terminating Company RSU or become converted into a Converted PSU (an “Untriggered PSU”), that is outstanding immediately prior to the Effective Time shall automatically be cancelled and, in exchange therefor, the Surviving Corporation shall issue to each former holder of any such cancelled Untriggered PSU one CVR with respect to each share subject to such Untriggered PSU (but no cash consideration). Parent shall cause the Surviving Corporation to pay or cause to be paid to former holders of Converted PSUs, the Converted PSU Cash Consideration as soon as practicable following the Effective Time (and in no event later than ten business days after the Effective Time).

Treatment of Company Warrants

Promptly following the Effective Time, and in any event no later than five business days following the Effective Time, Parent shall cause the Surviving Corporation or the Paying Agent to pay to each former holder of an In the Money Company Warrant an amount in cash equal to the product of (i) the number of warrant shares issuable upon the cashless exercise of such In the Money Company Warrant (as determined in accordance with the cashless exercise formula set forth in the applicable Company Warrant, with the fair market value per share for purposes of such formula being equal to the Closing Amount) and (ii) the Merger Consideration, less any applicable tax withholding. Each Company Warrant that is not an In the Money Company Warrant (an “Out of the Money Company Warrant”) that is outstanding immediately prior to the Effective Time shall automatically be deemed to be exercised into the number of shares subject to such Out of the Money Company Warrant and

 

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shall thereupon at the Effective Time be converted automatically into the right to receive one CVR for each share subject to such Out of the Money Company Warrant (and no cash consideration).

Treatment of XOMA Royalty ESPP

As promptly as practicable following the date of the Merger Agreement, the XOMA Royalty Board (or any committee thereof administering XOMA Royalty’s 2015 Employee Stock Purchase Plan or 2025 Employee Stock Purchase Plan, each a “XOMA Royalty ESPP”) shall take all actions necessary to provide that (i) no new offering period shall commence under any XOMA Royalty ESPP on or after the date of the Merger Agreement, (ii) no individual who is not participating in a XOMA Royalty ESPP as of the date of the Merger Agreement may commence participation therein, (iii) no participant may increase his or her rate of payroll contributions under any XOMA Royalty ESPP from the rate in effect as of the date of the Merger Agreement, (iv) each XOMA Royalty ESPP shall terminate no later than immediately prior to the Effective Time, and (v) any outstanding offering period under any XOMA Royalty ESPP shall be shortened so that a purchase date shall occur on or prior to the date that is five business days prior to the anticipated Closing Date. Any shares purchased under a XOMA Royalty ESPP shall be treated as outstanding shares for purposes of the Merger Consideration.

Exchange of Shares

Paying Agent

Prior to the Effective Time, Parent will designate a bank, trust company or nationally recognized stockholder services provider that is reasonably acceptable to XOMA Royalty to act as the paying agent for the Merger (the “Paying Agent”). At or prior to the Effective Time, Parent shall deposit (or cause to be deposited) with the Paying Agent cash sufficient to pay the aggregate Merger Consideration, including all amounts payable to holders of Shares and Company Warrants and, to the extent the Perpetual Preferred Redemption is consummated at or after the Effective Time, holders of Perpetual Preferred Stock, pursuant to the Merger Agreement.

Exchange Procedures

Promptly after the Effective Time, and in no event later than the third business day following the Effective Time, Parent shall cause the Paying Agent to deliver to each holder of record of shares represented by certificates immediately prior to the Effective Time (i) a letter of transmittal and (ii) instructions for effecting the surrender of such certificates in exchange for the Merger Consideration that such holder has the right to receive. Upon surrender of such certificates to the Paying Agent, together with a duly completed letter of transmittal, the holder of such shares will be entitled to receive the Merger Consideration in respect thereof. Until surrendered, each share represented by a certificate will be deemed to represent only the right to receive the Merger Consideration. Promptly after the Effective Time, and in no event later than the third business day following the Effective Time, Parent shall cause the Paying Agent to issue and deliver to each holder of uncertificated book-entry shares immediately prior to the Effective Time a check or wire transfer for the amount of cash that such holder is entitled to receive pursuant to the Merger Agreement in respect of such book-entry shares, without such holder being required to deliver a certificate or an executed letter of transmittal to the Paying Agent, and such book-entry shares shall then be cancelled.

Dissenter’s Rights

XOMA Royalty stockholders are entitled to dissent from the Merger and obtain payment for the “fair value” of their shares of XOMA Royalty common stock in connection with the Merger Agreement Proposal if they properly preserve and exercise their dissenter’s rights under the provisions of NRS 92A.300 through 92A.500, inclusive (the “Nevada Dissenter’s Rights Statutes”, and such rights, “Dissenter’s Rights”). Please note that XOMA Royalty stockholders who are entitled to and wish to exercise such Dissenter’s Rights must (i) not vote,

 

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or cause or permit to be voted, their shares in favor of the Merger Agreement Proposal, (ii) deliver written notice to XOMA Royalty indicating their intent to assert Dissenter’s Rights prior to the taking of the vote on the Merger Agreement Proposal at the Special Meeting and (iii) otherwise comply with the requirements of the Nevada Dissenter’s Rights Statutes, all as generally described in this summary and as more fully set forth in the Nevada Dissenter’s Rights Statutes. A copy of the Nevada Dissenter’s Rights Statutes, as amended to the date hereof, are set forth in Annex G. XOMA Royalty stockholders who follow the specified procedures may be entitled, as dissenting stockholders, to receive a cash payment for the “fair value” of their XOMA Royalty capital stock, all as more fully set forth therein.

THE FOLLOWING DISCUSSION IS NOT A COMPLETE STATEMENT OF THE LAW PERTAINING TO DISSENTER’S RIGHTS UNDER NEVADA LAW AND IS QUALIFIED IN ITS ENTIRETY BY THE FULL TEXT OF THE NEVADA DISSENTER’S RIGHTS STATUTES, A COPY OF WHICH IS ATTACHED HERETO AS ANNEX G. ALL REFERENCES IN THE NEVADA DISSENTER’S RIGHTS STATUTES AND IN THIS SUMMARY TO A “STOCKHOLDER” ARE TO THE RECORD HOLDER OF THE SHARES AS TO WHICH DISSENTER’S RIGHTS ARE ASSERTED. IF YOU HAVE A BENEFICIAL INTEREST IN SHARES OF XOMA ROYALTY CAPITAL STOCK HELD OF RECORD IN THE NAME OF ANOTHER PERSON, YOU MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY THE STEPS SUMMARIZED BELOW AND IN A TIMELY MANNER TO PERFECT YOUR DISSENTER’S RIGHTS.

Availability of Dissenter’s Rights to Stockholders under Nevada Law

In general, a stockholder of a Nevada corporation may be entitled to dissent from, and obtain payment of the fair value of his, her or its shares in connection with, certain transactions involving the Nevada corporation, including, among others, most mergers, conversions in which the stockholder’s interests will be converted, and exchanges in which the stockholder’s shares are to be acquired.

Certain exemptions from the Nevada Dissenter’s Rights Statutes, which are not applicable to XOMA Royalty stockholders with respect to the Merger, exist for classes or series of securities that are publicly or broadly held and traded, to the extent they are obligated under the Merger Agreement to accept only (i) cash, (ii) securities or other proprietary interests of any other entity, including CVRs, that satisfy certain marketability standards, or (iii) any combination of (i) and (ii).

A stockholder who wishes to assert dissenter’s rights in connection with the Merger, to the extent available, must comply with all of the requirements for asserting and preserving their dissenter’s rights under the Nevada Dissenter’s Rights Statutes, including, among others, delivering a Statement of Intent (as defined and described below) to assert dissenter’s rights and demand payment for the stockholder’s shares if the Merger is effectuated, prior to the taking of the vote on the Merger Agreement Proposal at the Special Meeting, and delivering a written demand for payment by the date set in a dissenter’s notice given by the corporation after the consummation of the Merger.

No Dissenter’s Rights are available in connection with entry into the Merger Agreement. If the Merger is consummated, however, a XOMA Royalty stockholder who (1) has not voted in favor of the Merger Agreement Proposal or otherwise waived such stockholder’s Dissenter’s Rights under applicable law, (2) provides a Statement of Intent as described below (each XOMA Royalty stockholder who complies with (1) and (2), a “Potential Dissenting Stockholder”) and (3) to the extent such Potential Dissenting Stockholder is entitled to such statutory rights under applicable law, thereafter properly exercises such Dissenter’s Rights with respect to such share(s) of XOMA Royalty capital stock (such stockholder, a “Dissenting Stockholder,” and the shares of XOMA Royalty capital stock being referred to as “Dissenting Shares” until such time as such Dissenting Stockholder fails to assert, waives, or otherwise loses such Dissenting Stockholder’s Dissenter’s Rights (if any) under applicable law with respect to such Dissenting Shares), will not be converted into the right to receive the consideration to which such Dissenting Shares would otherwise be entitled under the Merger Agreement, but instead will, effective as of the consummation of the Merger, no longer be outstanding and will automatically be

 

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cancelled and extinguished and cease to exist, and except as otherwise provided by law, the Dissenting Stockholder holding such Dissenting Shares will cease to have any rights with respect thereto other than the rights required by the applicable provisions of the Nevada Dissenter’s Rights Statutes.

IF A XOMA ROYALTY STOCKHOLDER INTENDS TO EXERCISE DISSENTER’S RIGHTS PURSUANT TO THE NEVADA DISSENTER’S RIGHTS STATUTES, SUCH STOCKHOLDER MUST NOT VOTE (OR CAUSE OR PERMIT SUCH STOCKHOLDER’S SHARES TO BE VOTED) IN FAVOR OF THE MERGER AGREEMENT PROPOSAL. VOTING (OR CAUSING OR PERMITTING SUCH STOCKHOLDER’S SHARES TO BE VOTED) IN FAVOR OF THE MERGER AGREEMENT PROPOSAL WILL ACT AS A WAIVER OF SUCH STOCKHOLDER’S DISSENTER’S RIGHTS. EACH STOCKHOLDER, IF ANY, WHO IS ENTITLED TO AND INTENDS TO EXERCISE DISSENTER’S RIGHTS ALSO MUST FOLLOW THE INSTRUCTIONS FOR PROVIDING NOTICE OF THEIR INTENT TO EXERCISE DISSENTER’S RIGHTS DESCRIBED BELOW.

No later than 10 days after the consummation of the Merger, HoldCo as the surviving corporation in the Merger (the “Surviving Corporation”) will send notice of the consummation of the Merger and notice of Dissenter’s Rights pursuant to NRS 92A.430 to each Potential Dissenting Stockholder and any such Potential Dissenting Stockholder that properly delivers a written demand for payment to the Surviving Corporation by the 30th day after such notice is delivered will be treated as a Dissenting Stockholder.

To the extent there are any inconsistencies between the foregoing summary and the Nevada Dissenter’s Rights Statutes, the statutes will govern. The foregoing summary of dissenter’s rights pursuant to the Nevada Dissenter’s Rights Statutes is qualified in its entirety by the text of such statutes.

THE PROCESS OF EXERCISING DISSENTER’S RIGHTS REQUIRES STRICT COMPLIANCE WITH THE PROVISIONS OF THE NEVADA DISSENTER’S RIGHTS STATUTES, AND THE FAILURE TO COMPLY WITH THESE PROVISIONS MAY RESULT IN THE LOSS OF SUCH RIGHTS. IN VIEW OF THE COMPLEXITY OF THESE PROVISIONS, XOMA ROYALTY STOCKHOLDERS WHO ARE CONSIDERING EXERCISING SUCH RIGHTS SHOULD CONSULT THEIR OWN LEGAL COUNSEL AND OTHER RELEVANT ADVISORS.

Prerequisites to Asserting Dissenter’s Rights

Pursuant to NRS 92A.420(1), any XOMA Royalty stockholder wishing to preserve his, her or its ability to assert dissenter’s rights under the Nevada Dissenter’s Rights Statutes in connection with the Merger, if consummated:

 

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Must not vote (or cause or permit such stockholder’s shares to be vote)in favor of the Merger Agreement Proposal; and

 

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Must deliver to XOMA Royalty at the address indicated below, before the vote is taken on the Merger Agreement Proposal at the Special Meeting, written notice of the stockholder’s intent to assert dissenter’s rights and demand payment for such stockholder’s shares if the Merger is effectuated (the “Statement of Intent”).

Each XOMA Royalty stockholder is urged to read carefully the materials contained in this joint proxy statement/prospectus in making a determination whether or not to deliver a Statement of Intent.

IN VIEW OF THE COMPLEXITY OF THE NEVADA DISSENTER’S RIGHTS STATUTES, EACH XOMA ROYALTY STOCKHOLDER SHOULD CONSULT HIS, HER OR ITS LEGAL COUNSEL AND OTHER RELEVANT ADVISERS PRIOR TO DECIDING WHETHER OR NOT TO DELIVER A STATEMENT OF INTENT TO XOMA ROYALTY.

 

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Additional Requirements for Assertion of Dissenter’s Rights

If XOMA Royalty receives requisite stockholder approval for the Merger Agreement Proposal and effectuates the Merger, the Surviving Corporation must then deliver, no later than 10 days after the effective date of the Merger, a written dissenter’s notice to all pre-Merger XOMA Royalty stockholders of record who have timely delivered a Statement of Intent to exercise their Dissenter’s Rights in connection with the Merger and who are otherwise entitled to assert such Dissenter’s Rights. The dissenter’s notice delivered by the Surviving Corporation must:

 

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State where the demand for payment must be sent and where and when share certificates, if any, must be deposited;

 

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Inform the holders of shares not represented by certificates the extent to which the transfer of the shares will be restricted after the Surviving Corporation receives the demand for payment;

 

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Supply a form for demanding payment that includes the date of the first announcement to the news media or to the XOMA Royalty stockholders of the terms of the proposed action and requires that the person asserting dissenter’s rights certify whether or not they acquired beneficial ownership of the shares before that date;

 

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Set a date by which the Surviving Corporation must receive the demand for payment, which must be no earlier than 30 days nor later than 60 days after the date the dissenter’s notice is delivered by the Surviving Corporation;

 

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State that the XOMA Royalty stockholder shall be deemed to have waived the right to demand payment with respect to the shares unless the form is received by the Surviving Corporation by the specified date; and

 

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Be accompanied by a copy of NRS 92A.300 through 92A.500.

The former XOMA Royalty stockholders who receive a dissenter’s notice and who wish to exercise dissenter’s rights must then:

 

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If such former XOMA stockholder was a beneficial owner of XOMA Royalty shares, obtain and submit to the Surviving Corporation (not later than the demand for payment) the written consent of the stockholder of record of the beneficially owned shares to the dissent, pursuant to NRS 92A.400(2);

 

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Demand payment;

 

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Certify whether the stockholder, or the beneficial owner on whose behalf such stockholder is dissenting, acquired beneficial ownership prior to the date specified in the dissenter’s notice; and

 

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Deposit the stockholder’s certificates, if any, in accordance with the terms of the dissenter’s notice.

Alternatively, any XOMA Royalty stockholders may withdraw from the appraisal process by notifying the Surviving Corporation in writing by the date specified in the dissenter’s notice. After this date, dissenters may withdraw only with the written consent of the Surviving Corporation.

Once a Dissenting Stockholder deposits the stockholder’s certificates (or, in the case of uncertificated shares, makes a demand for payment), such Dissenting Stockholder loses all rights as a stockholder, unless such Dissenting Stockholder later withdraws from the appraisal process. The Surviving Corporation may restrict the transfer of uncertified shares from the date the Surviving Corporation receives the dissenter’s demand for payment.

Within 30 days of receiving the demand for payment, the Surviving Corporation must pay in cash to each Dissenting Stockholder who complied with NRS 92A.440 the amount the Surviving Corporation estimates to be the fair value of the Dissenting Stockholder’s shares, plus accrued interest. This payment must be accompanied by:

 

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XOMA Royalty’s balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income for that year, a statement of changes in the XOMA Royalty

 

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stockholders’ equity for that year or, if such financial statements are not reasonably available, then such reasonably equivalent financial information and the latest available quarterly financial statements, if any;

 

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A statement of the Surviving Corporation’s estimate of the fair value of the shares; and

 

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A statement of the dissenter’s rights to contest the Surviving Corporation’s estimate of fair value.

If any Dissenting Stockholders wish to contest the Surviving Corporation’s estimate of fair value, they must notify the Surviving Corporation in writing within 30 days of receiving the Surviving Corporation’s payment or offer of payment. Dissenting Stockholders must provide their own estimate of fair value plus interest and demand that the Surviving Corporation pay the difference between this estimate and the Surviving Corporation’s estimate. The Surviving Corporation must either pay the additional amount or commence judicial proceedings within 60 days of receiving the demand and petition the court to determine the fair value of the shares and accrued interest.

Withholding Rights

Each of Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of shares, Company Warrants, Perpetual Preferred Stock, Depositary Shares, Company Stock Options, Company RSUs, Company PSUs or otherwise pursuant to the Merger Agreement (including the issuance of, and payments under, the CVRs) such amounts as Parent, the Surviving Corporation or the Paying Agent is required to deduct and withhold under the Code or any provision of state, local or foreign tax law. To the extent amounts are so deducted or withheld and remitted to the applicable governmental entity, such amounts will be treated for all purposes under the Merger Agreement as having been paid to the person in respect of which such deduction and withholding was made.

Representations and Warranties

The Merger Agreement contains representations and warranties made by XOMA Royalty, on the one hand, and by Parent and Merger Sub, on the other hand. Such representations and warranties are subject, in some cases, to specified exceptions and qualifications contained in confidential disclosure letters and qualified by certain information filed by the parties with the SEC, excluding, in each case, any disclosures set forth in any risk factor section, any “forward-looking statements” section or any other section to the extent they are forward-looking statements or cautionary, predictive or forward-looking in nature. XOMA Royalty has made extensive customary representations and warranties regarding its historical business and operations, financial affairs, compliance with laws, and other matters potentially relevant to Parent’s assessment of XOMA Royalty’s business, as described more fully in the Merger Agreement.

Parent and Merger Sub have made customary representations and warranties regarding facts and circumstances potentially relevant to their ability to perform their respective obligations under the Merger Agreement and the binding nature of the Merger Agreement.

Many of the representations and warranties in the Merger Agreement are qualified by a “materiality” or “material adverse effect” standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct, individually or in the aggregate, would, as the case may be, be material or have a material adverse effect). The representations and warranties in the Merger Agreement were intended to be relied upon by the parties to the agreement and not by any third parties. Many of the representations and warranties have been qualified by schedules which have not been publicly disclosed. Accordingly, investors are advised not to rely on the representations and warranties from the Merger Agreement as unqualified statements of fact.

The representations and warranties of the parties do not survive the Effective Time of the Merger.

 

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XOMA Royalty Conduct of Business

In the Merger Agreement, XOMA Royalty has agreed to certain obligations and restrictions with respect to the conduct of its business from the date of the Merger Agreement until the Effective Time (or the earlier termination of the Merger Agreement), subject to certain specified exceptions, and unless permitted by the Merger Agreement or required by law or with the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed). XOMA Royalty and each of its subsidiaries will (i) conduct its business in the ordinary course of business in all material respects, and (ii) use commercially reasonable efforts to preserve substantially intact its business organizations, material assets, and existing relationships with licensees, partners, counterparties to royalty purchase agreements and other material commercial partners.

In addition, XOMA Royalty and each of its subsidiaries have agreed to customary interim operating covenants restricting certain actions between signing and closing without Parent’s prior written consent, including, among other things, restrictions relating to amendments to organizational documents, equity issuances, acquisitions and dispositions, indebtedness, material contracts, compensation and employee benefits matters, dividends and other distributions, and certain other actions outside the ordinary course of business, in each case subject to specified exceptions and qualifications set forth in the Merger Agreement.

As with the representations and warranties, these interim operating covenants may be qualified by disclosure schedules that have not been publicly disclosed. Accordingly, investors should not necessarily rely on such covenants as characterizations of the actual conduct of XOMA Royalty’s operations during the period between the execution of the Merger Agreement and the Effective Time.

No Solicitation of Acquisition Proposals

XOMA Royalty has agreed that it will not, and that it will cause its subsidiaries and their respective representatives not to, directly or indirectly, from the date of the Merger Agreement until the Effective Time (or the earlier termination of the Merger Agreement):

 

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solicit, initiate or knowingly encourage any inquiries or the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal;

 

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participate in any discussions or negotiations (other than to refer the inquiring person to the non-solicitation provisions of the Merger Agreement or to clarify terms for the purpose of the XOMA Royalty Board reasonably informing itself as to such Acquisition Proposal) or cooperate in any way with any person regarding any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal; and

 

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furnish any non-public information concerning XOMA Royalty or any of its subsidiaries or afford access to the business, properties, assets, employees, consultants, books or records of XOMA Royalty or any of its subsidiaries to any person in connection with any proposal that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal.

XOMA Royalty has also agreed to promptly cease and cause to be terminated any existing activities, discussions or negotiations with any persons conducted prior to the date of the Merger Agreement with respect to any Acquisition Proposal, including terminating access to any existing electronic data rooms. Nothing in the Merger Agreement restricts XOMA Royalty from permitting a person to request the waiver of a “standstill” or similar obligation solely to allow such person to make a confidential Acquisition Proposal to the XOMA Royalty Board, or from granting such a waiver, in each case, to the extent necessary to comply with fiduciary duties under applicable law.

An “Acquisition Proposal” means, with respect to XOMA Royalty, any inquiry, proposal or offer from, or indication of interest in making a proposal or offer by, any person or group (other than Parent or its subsidiaries) relating to any transaction or series of related transactions involving: (i) a merger, reorganization, consolidation,

 

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share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving XOMA Royalty or any subsidiary or subsidiaries of XOMA Royalty whose business constitutes 20% or more of the net revenues, net income or assets of XOMA Royalty and its subsidiaries, taken as a whole; (ii) the acquisition in any manner, directly or indirectly, of 20% or more of the equity securities or consolidated total assets of XOMA Royalty and its subsidiaries, taken as a whole; (iii) any liquidation, dissolution, recapitalization or other significant corporate reorganization of XOMA Royalty or one or more of its subsidiaries constituting 20% or more of the net revenues, net income or assets of XOMA Royalty and its subsidiaries, taken as a whole; or (iv) any combination of the foregoing.

Notwithstanding the limitations described above, prior to the time XOMA Royalty stockholder approval of the Merger Agreement (the “Stockholder Approval”) is obtained, XOMA Royalty may, in response to an unsolicited bona fide written Acquisition Proposal (which was made after the date of the Merger Agreement and has not been withdrawn) that did not result from a breach of the non-solicitation provisions and that the XOMA Royalty Board determines in good faith, after consultation with its financial advisors and outside legal counsel, constitutes or would reasonably be expected to lead to a Superior Proposal: (i) furnish information with respect to XOMA Royalty and its subsidiaries to the person making such Acquisition Proposal pursuant to a customary confidentiality agreement on terms substantially similar to those contained in the confidentiality agreement between XOMA Royalty and Parent (except for such changes specifically necessary in order for XOMA Royalty to be able to comply with its obligations under the Merger Agreement), provided that XOMA Royalty shall promptly provide or make available to Parent any material non-public information concerning XOMA Royalty or any of its subsidiaries that is provided to such person which was not previously provided or made available to Parent; and (ii) participate in discussions or negotiations with such person and its representatives regarding such Acquisition Proposal; in each case, only if the XOMA Royalty Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law.

A “Superior Proposal” means any bona fide written Acquisition Proposal on terms which the XOMA Royalty Board determines in good faith, after consultation with XOMA Royalty’s outside legal counsel and financial advisors, to be (A) more favorable from a financial point of view to the holders of shares than the Merger and the other transactions contemplated by the Merger Agreement, taking into account all the terms and conditions of such proposal (including the legal, financial, financing, regulatory and other aspects of the proposal or offer, the person making the proposal or offer, termination or break-up fees, expense reimbursement provisions, transaction consideration, conditionality, timing, certainty of regulatory approvals and likelihood of consummation), and the Merger Agreement (and, if applicable, any changes to the terms of the Merger Agreement proposed by Parent) and (B) reasonably capable of being completed on the terms proposed, in each case taking into account all financial, regulatory, financing, timing, conditionality, legal and other aspects of such proposal or offer. For purposes of the definition of “Superior Proposal,” the references to “20%” in the definition of “Acquisition Proposal” are deemed to be references to “50%.”

Notice Regarding Acquisition Proposals

XOMA Royalty must promptly (and, in any event, within 24 hours) advise Parent orally and in writing of (i) any Acquisition Proposal, (ii) any request for non-public information relating to XOMA Royalty or its subsidiaries, other than requests for information not related to, and not reasonably expected to lead to, an Acquisition Proposal, and (iii) any inquiry or request for discussion or negotiation, or any inquiry or request related to, or that would reasonably be expected to result in or lead to, an Acquisition Proposal, including in each case the identity of the person making any such Acquisition Proposal, inquiry or request and the material terms thereof, together with copies of material communications received from such person or its representatives related thereto. XOMA Royalty must thereafter keep Parent informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations, including any material amendments or proposed amendments as to price, proposed financing, and other material terms thereof, and provide Parent with copies of all material communications received from such person related thereto.

 

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No Change in Recommendation

XOMA Royalty has agreed that, except as otherwise permitted by the Merger Agreement, the XOMA Royalty Board, including any committee thereof, will not:

 

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effect an Adverse Recommendation Change (provided that delivery of a written notice to Parent as contemplated by the Merger Agreement, or public disclosure that such notice has been delivered to Parent, shall not be deemed to constitute an Adverse Recommendation Change); or

 

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cause or permit XOMA Royalty or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, or other similar contract relating to any Acquisition Proposal (an “Alternative Acquisition Agreement”).

Permitted Change in Recommendation—Intervening Event

Notwithstanding the restrictions described above, prior to the time the Stockholder Approval is obtained, the XOMA Royalty Board may make an Adverse Recommendation Change in response to an Intervening Event (as defined below) if the following conditions are met:

 

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XOMA Royalty must have provided to Parent at least five business days’ prior written notice, which must (a) set forth in reasonable detail information describing the Intervening Event, and (b) state expressly that the XOMA Royalty Board has determined to effect an Adverse Recommendation Change, and XOMA Royalty must have engaged in good faith negotiations with Parent (to the extent Parent wishes to engage) during such notice period to consider adjustments to the terms and conditions of the Merger Agreement; and

 

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the XOMA Royalty Board must have determined in good faith, after consultation with outside financial advisors and outside legal counsel, that, in light of such Intervening Event and taking into account any revised terms proposed in writing by Parent, the failure to make an Adverse Recommendation Change would be inconsistent with the directors’ fiduciary duties under applicable law.

An “Intervening Event” means any material event that (a) occurs or arises after the date of the Merger Agreement and (b) was not known to, or reasonably foreseeable by, the XOMA Royalty Board as of or prior to the date of the Merger Agreement (or, if known or reasonably foreseeable, the material consequences thereof were not known or reasonably foreseeable), and (c) does not relate to (i) any Acquisition Proposal or any inquiry or communications relating thereto, (ii) changes in the market price or trading volume of XOMA Royalty securities (although the underlying causes thereof may constitute an Intervening Event), (iii) changes in GAAP or applicable law, (iv) events, changes or developments relating to Parent or Merger Sub, (v) breaches of the Merger Agreement by XOMA Royalty or (vi) actions taken pursuant to the Merger Agreement.

Permitted Change in Recommendation—Superior Proposal

Prior to the time the XOMA Royalty stockholder approval is obtained, following receipt by XOMA Royalty of an unsolicited, bona fide written Acquisition Proposal (which Acquisition Proposal was made after the date of the Merger Agreement) that did not result from a breach of the non-solicitation provisions of the Merger Agreement, the XOMA Royalty Board may make an Adverse Recommendation Change and/or terminate the Merger Agreement to enter into an Alternative Acquisition Agreement with respect to such Acquisition Proposal if all of the following conditions are met:

 

•

XOMA Royalty must have provided to Parent at least five business days’ prior written notice, which must state expressly (a) that XOMA Royalty has received a written Acquisition Proposal that constitutes a Superior Proposal, (b) that, subject to the terms of the Merger Agreement, the XOMA Royalty Board has determined to effect an Adverse Recommendation Change and/or terminate the Merger Agreement in order to enter into an Alternative Acquisition Agreement and (c) the material terms and conditions of the Acquisition Proposal (including the consideration offered therein and the

 

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identity of the person making the Acquisition Proposal), and must have contemporaneously provided an unredacted copy of the Alternative Acquisition Agreement and all other related material documents (other than immaterial documents) (it being understood and agreed that any amendment to the financial terms or any other material term or condition of such Superior Proposal will require a new notice and an additional three business day period);

 

•

the XOMA Royalty Board must have determined in good faith, after consultation with outside financial advisors and outside legal counsel, that, taking into account any revised terms proposed in writing by Parent, such Acquisition Proposal continues to constitute a Superior Proposal and the failure to make an Adverse Recommendation Change and/or terminate the Merger Agreement would be inconsistent with the directors’ fiduciary duties under applicable law.

Access to Information; Confidentiality

From the date of the Merger Agreement to the Effective Time or the earlier termination of the Merger Agreement, upon reasonable prior written notice, XOMA Royalty shall, and shall cause its subsidiaries, officers, directors and representatives to, afford to Parent and its representatives reasonable access during normal business hours, consistent with applicable law, to its officers, employees, properties, offices, other facilities and books and records, and shall furnish Parent with all financial, operating and other data and information as Parent shall reasonably request in writing; provided, that neither XOMA Royalty nor any of its subsidiaries will be required to prepare any such data or information other than in the ordinary course of business, and any such investigation or consultation shall be conducted in such a manner as not to interfere unreasonably with the business or operations of XOMA Royalty or its subsidiaries.

Regulatory Approvals; Consents

Upon the terms and subject to the conditions of the Merger Agreement, each of the parties shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and cooperate with each other in order to do, all things necessary, proper or advisable under applicable law (including under any antitrust law) to consummate the transactions contemplated by the Merger Agreement at the earliest practicable date, including: (i) causing the preparation and filing of all forms, registrations and notices required to be filed to consummate the merger and the taking of such actions as are necessary to obtain any requisite consent or expiration of any applicable waiting period under the HSR Act or any other antitrust law; (ii) using reasonable best efforts to defend all lawsuits and other proceedings by or before any governmental entity challenging the Merger Agreement or the consummation of the Merger; and (iii) using reasonable best efforts to resolve any objection asserted with respect to the transactions contemplated under the Merger Agreement under any antitrust law raised by any governmental entity and to prevent the entry of, and to have vacated, lifted, reversed or overturned, any ruling, order, judgment, injunction or decree (whether temporary, preliminary or permanent) or other action of any governmental entity that would restrain, delay, prevent, or prohibit the consummation of the transactions contemplated by the Merger Agreement.

In furtherance of the foregoing, each of the parties agrees to prepare and file as promptly as practicable, and in any event by no later than ten business days from the date of the Merger Agreement, an appropriate filing of a Notification and Report Form pursuant to the HSR Act. Parent shall not withdraw any such filing pursuant to the HSR Act without XOMA Royalty’s prior written consent. Parent shall pay all filing fees and other charges for the filings required under the HSR Act by XOMA Royalty and Parent.

The parties shall keep each other apprised of status with respect to regulatory approvals and work cooperatively in connection with obtaining the approvals of or clearances from each applicable governmental entity, including cooperating with each other in connection with filings required to be made under any antitrust law and liaising with each other in relation to each step of the procedure before the relevant governmental entities. In particular, no party will make any notification in relation to the transactions contemplated by the Merger Agreement without first providing the other party with a copy of such notification in draft form and giving such other party a reasonable opportunity to discuss its content before it is filed.

 

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In addition, Parent shall take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all antitrust laws to consummate the transactions contemplated by the Merger Agreement at the earliest practicable date. Parent and XOMA Royalty shall not, and Parent shall cause its affiliates not to, knowingly take any action, or knowingly refrain from taking any action, the effect of which would be to materially delay or impede the ability of the parties to consummate the transactions contemplated by the Merger Agreement.

Employee and Benefits Matters

Without limiting any additional rights that any current or former employee of XOMA Royalty or any of its subsidiaries (a “XOMA Royalty Employee”) may have under any Company Plan, except as otherwise agreed in writing between Parent and a XOMA Royalty Employee, Parent shall cause the Surviving Corporation and each of its subsidiaries, for a period commencing at the Effective Time and ending on the first anniversary thereof, to maintain the severance-related provisions of existing Company Plans identified to Parent at the signing of the Merger Agreement and to provide 100% of the severance payments and benefits required to be provided thereunder to any XOMA Royalty Employee terminated in a severance-eligible circumstance during such 12-month period.

Except as otherwise agreed in writing between Parent or its subsidiary and a XOMA Royalty Employee, Parent shall cause the Surviving Corporation and each of its subsidiaries, for the period commencing at the Effective Time and ending on the first anniversary thereof (or if earlier, such XOMA Royalty Employee’s termination of employment), to maintain for each XOMA Royalty Employee (i) a base salary level that is no less favorable than the base salary provided to such XOMA Royalty Employee immediately prior to the Effective Time, and (ii) employee benefits that, in the aggregate, are substantially comparable to the employee benefits maintained for and provided to similarly situated employees of Parent (excluding retention or change in control benefits and benefits pursuant to any plan or program of Parent and its subsidiaries that is frozen to new entrants or new accruals). Parent may, in its discretion, during the period between the date of the Merger Agreement and the Closing, negotiate other terms and conditions of employment with XOMA Royalty Employees.

As of and after the Effective Time, Parent will, or will cause the Surviving Corporation to, use commercially reasonable efforts to give each XOMA Royalty Employee full credit for purposes of eligibility, benefit vesting and benefit accruals (but not for purposes of vesting of equity awards or benefit accruals under any defined benefit pension plans), under any employee compensation, incentive, and benefit plans maintained for the benefit of XOMA Royalty Employees as of and after the Effective Time by Parent, its subsidiaries or the Surviving Corporation, to the same extent recognized by XOMA Royalty immediately prior to the Effective Time. With respect to each such welfare benefit plan, Parent and its subsidiaries shall use commercially reasonable efforts to (i) cause there to be waived any pre-existing condition or eligibility limitations and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, XOMA Royalty Employees under similar plans maintained by XOMA Royalty and its subsidiaries immediately prior to the Effective Time.

From and after the Effective Time, except as otherwise agreed in writing between Parent and a XOMA Royalty Employee or as otherwise provided in the Merger Agreement, Parent will honor, and will cause its subsidiaries to honor, in accordance with its terms, (i) each existing and enforceable employment, change in control, severance and termination protection plan, policy or agreement of or between XOMA Royalty or any of its subsidiaries and any officer, director or employee of that company, (ii) all obligations in effect as of the Effective Time under any equity-based, bonus or bonus deferral plans, programs or agreements of XOMA Royalty or its subsidiaries and (iii) all obligations in effect as of the Effective Time pursuant to outstanding restoration or equity-based plans, programs or agreements, and all vested and accrued benefits under any employee benefit, employment compensation or similar plans.

 

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Financing Cooperation

The Merger Agreement provides that, prior to the closing, XOMA Royalty will use commercially reasonable efforts to provide, and to cause its subsidiaries and representatives to provide, at Parent’s sole cost and expense, all cooperation reasonably requested by Parent in connection with the arrangement and consummation of any debt financing, to the extent such cooperation does not unreasonably interfere with XOMA Royalty’s business. Such cooperation may include, among other things, participation by senior officers of XOMA Royalty in lender meetings, lender presentations and due diligence sessions; assistance with the preparation of customary marketing materials; delivery of “know your customer” and anti-money laundering documentation; provision of customary financial and operating information; and delivery of customary authorization and representation letters.

XOMA Royalty’s cooperation obligations are subject to certain limitations, including that XOMA Royalty is not required to waive or amend terms of the Merger Agreement, incur any unreimbursed liability, enter into any definitive financing agreement prior to the closing (other than customary authorization letters and KYC information), take any action that would jeopardize attorney-client privilege or violate applicable law, or prepare or deliver certain excluded information such as pro forma projections, synergies estimates, segment financial information or other information customarily provided by financing sources.

Parent shall, promptly upon request by XOMA Royalty, reimburse XOMA Royalty for all reasonable out-of-pocket costs incurred in connection with such cooperation (other than any costs incurred in connection with the preparation, review and audit of historical financial information and the XRL-1 Payoff Letter (as defined below) and any other payoff letters) and, together with Merger Sub on a joint and several basis, to indemnify and hold harmless XOMA Royalty, its affiliates and their representatives from any liabilities incurred in connection with the debt financing (other than liabilities resulting from XOMA Royalty’s fraud, gross negligence or willful misconduct). All non-public or otherwise confidential information regarding XOMA Royalty or its subsidiaries provided in connection with the debt financing is subject to the confidentiality agreement between the parties.

The obligations of Parent and Merger Sub to consummate the Merger are not subject to any financing condition.

XRL-1 Credit Agreement Payoff

The Merger Agreement provides that, prior to closing, XOMA Royalty will use commercially reasonable efforts to, and to cause XRL 1 LLC, a Delaware limited liability company (“XRL-1”) and direct, wholly owned subsidiary of XOMA (US) LLC, a Delaware limited liability company (“XOMA US”) and direct, wholly owned subsidiary of XOMA Royalty, and its representatives to, cause the agent under that certain Loan Agreement, dated as of December 15, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among XRL-1, the lenders from time to time party thereto and Blue Owl Capital Corporation, as administrative agent, to deliver to XRL-1 (in which case XOMA Royalty shall cause XRL-1 to provide to Parent) an executed payoff letter in a customary form reasonably satisfactory to Parent and executed related release documentation (the “XRL-1 Payoff Letter”).

Directors’ and Officers’ Indemnification, Exculpation and Insurance

Without limiting any additional rights that any employee may have under any agreement or Company Plan, the Merger Agreement provides that from the Effective Time through the sixth anniversary of the date on which the Effective Time occurs, Parent shall, or shall cause the Surviving Corporation to, indemnify and hold harmless each present (as of the Effective Time) and former officer or director of XOMA Royalty and its subsidiaries, referred to as the indemnified parties, against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements incurred in connection with any action, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that the indemnified party is or was an officer, director, employee, fiduciary or agent of XOMA Royalty or any of its

 

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subsidiaries or matters existing or occurring at or prior to the Effective Time (including the Merger Agreement and the transactions contemplated thereby), whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under applicable law and XOMA Royalty articles of incorporation and XOMA Royalty Bylaws as at the date of the Merger Agreement.

In the event of any such action, each indemnified party shall be entitled to advancement of expenses incurred in the defense of any such action from Parent or the Surviving Corporation to the fullest extent permitted under applicable law and the XOMA Royalty articles of incorporation and XOMA Royalty Bylaws within 20 days of receipt by Parent or the Surviving Corporation from the indemnified party of a request therefor; provided, that any person to whom expenses are advanced provides an undertaking, if and only to the extent required by NRS or the XOMA Royalty articles of incorporation or XOMA Royalty Bylaws, to repay such advances if it is ultimately determined that such person is not entitled to indemnification. Neither Parent nor the Surviving Corporation shall settle, compromise or consent to the entry of any judgment in any such proceeding unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability arising out of such action or such indemnified party otherwise consents.

The articles of incorporation and bylaws of the Surviving Corporation shall contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of former or present directors and officers than are presently set forth in the XOMA Royalty articles of incorporation and XOMA Royalty Bylaws, which provisions shall not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of any such individuals.

For a period of six years from the Effective Time, Parent shall either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by XOMA Royalty and its subsidiaries or cause to be provided substitute policies or purchase a “tail policy,” in either case of at least the same coverage and amounts containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the Effective Time; provided, however, that after the Effective Time, Parent shall not be required to pay with respect to such insurance policies in respect of any one policy year annual premiums in excess of 300% of the last annual premium paid by XOMA Royalty prior to the date of the Merger Agreement. At XOMA Royalty’s option, XOMA Royalty may purchase, prior to the Effective Time, a six-year prepaid “tail policy” on terms and conditions providing substantially equivalent benefits as the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by XOMA Royalty and its subsidiaries with respect to matters arising on or before the Effective Time.

Notwithstanding anything in the Merger Agreement to the contrary, if any action is instituted against any indemnified party on or prior to the sixth anniversary of the Effective Time, the foregoing provisions shall continue in effect until the final disposition of such action.

The indemnification provided for in the Merger Agreement is not deemed exclusive of any other rights to which an indemnified party may be entitled, whether pursuant to law, contract or otherwise.

These provisions shall survive the consummation of the Merger and are expressly intended to benefit, and shall be enforceable by, each of the indemnified parties and their respective heirs and legal representatives (and may not be amended without their prior written consent). In the event that the Surviving Corporation or Parent or any of their respective successors or assigns consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or transfers or conveys all or a majority of its properties and assets to any person, then proper provision shall be made so that the successors and assigns of the Surviving Corporation or Parent shall succeed to these obligations.

Nasdaq Delisting

To the extent requested by Parent, prior to the Closing Date, XOMA Royalty shall cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things,

 

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reasonably necessary, proper or advisable on its part under applicable laws and rules and policies of Nasdaq to enable the delisting by the Surviving Corporation of the shares from Nasdaq as promptly as practicable after the Effective Time and the deregistration of the shares under the Exchange Act at the Effective Time.

Directors and Officers of the Surviving Corporation

Prior to the Effective Time, the Company shall cause each member of the XOMA Royalty Board to execute and deliver a letter effectuating his or her resignation as a director of the XOMA Royalty Board effective immediately prior to the Effective Time. At the Effective Time, the directors of Merger Sub immediately prior to the Effective Time shall be, and shall constitute all of, the directors of the Surviving Corporation, and the officers of XOMA Royalty immediately prior to the Effective Time shall be, and shall constitute all of, the officers of the Surviving Corporation, in each case, to serve until the earlier of their respective resignation, death or removal or until their respective successors are duly elected and qualified, in accordance with the articles of incorporation and the bylaws of the Surviving Corporation and applicable law.

Public Announcements

Parent and XOMA Royalty agree that the press release announcing the execution and delivery of the Merger Agreement shall be a joint release of Parent and XOMA Royalty. Thereafter, each of XOMA Royalty and Parent agrees that no public release, statement, announcement, or other disclosure concerning the Merger and the other transactions contemplated by the Merger Agreement that is inconsistent with the initial press release or other release, statement, announcement or other disclosure made in accordance with the Merger Agreement shall be issued by any party without the prior written consent of the other party, which consent shall not be unreasonably withheld, except (i) as may be required by applicable law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system, the rules or regulations of any applicable United States securities exchange, or any governmental entity to which the relevant party is subject (in which case the party making such disclosure shall use its reasonable best efforts to provide the other party with an opportunity to review and comment on such disclosure) or (ii) with respect to any Acquisition Proposal made after the date of the Merger Agreement by a person other than Parent or any of its subsidiaries as permitted by the non-solicitation provisions of the Merger Agreement.

Stockholder Litigation

XOMA Royalty shall promptly advise Parent in writing after becoming aware of any legal action or proceeding commenced, or to XOMA Royalty’s knowledge, threatened, against XOMA Royalty or any of its directors by any stockholder of XOMA Royalty (on their own behalf or on behalf of XOMA Royalty ) relating to the Merger Agreement or the transactions contemplated thereby and shall keep Parent reasonably informed regarding any such legal action or proceeding. XOMA Royalty shall: (a) give Parent the opportunity to participate in the defense and settlement of any such stockholder litigation (at Parent’s cost), (b) keep Parent reasonably apprised on a prompt basis of the status and proposed strategy of any such stockholder litigation and consider in good faith, acting reasonably, Parent’s advice with respect to the defense of any such litigation, and (c) not settle any such stockholder litigation without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed, or conditioned).

Conditions to the Completion of the Merger

Mutual Conditions

Each party’s obligation to effect the Merger is subject to the satisfaction or waiver at or prior to the Effective Time of each of the following conditions:

 

•

the Stockholder Approval shall have been obtained;

 

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•

no ruling, order, judgment, injunction or decree (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction nor any other legal restraint or prohibition shall be in effect, and no law shall have been enacted, entered, promulgated, enforced or deemed applicable by any governmental entity that, in any case, enjoins, restrains, prevents or prohibits or makes illegal the consummation of the transactions contemplated by the Merger Agreement;

 

•

any applicable waiting period (and any extension thereof) under the HSR Act relating to the transactions contemplated by the Merger Agreement, as well as any agreement not to close embodied in a “timing agreement” between the parties and a governmental entity, shall have expired or been terminated; and

 

•

the Holding Company Reorganization shall have been duly completed in accordance with the Merger Agreement and any related transaction documents.

Conditions to the Obligations of XOMA Royalty

The obligation of XOMA Royalty to effect the Merger is also subject to the satisfaction, or waiver by XOMA Royalty, at or prior to the Effective Time of the following conditions:

 

•

the representations and warranties of Parent and Merger Sub set forth in the Merger Agreement shall be true and correct as of the date of the Merger Agreement and as of the Closing Date as though made as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date), except for inaccuracies that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect (disregarding all materiality and similar qualifiers);

 

•

Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by them under the Merger Agreement at or prior to the Effective Time; and

 

•

XOMA Royalty shall have received a certificate signed by an executive officer of Parent certifying as to the foregoing matters.

Conditions to the Obligations of Parent and Merger Sub

The obligation of Parent and Merger Sub to effect the Merger is also subject to the satisfaction, or waiver by Parent, at or prior to the Effective Time of the following conditions:

 

•

the representations and warranties of XOMA Royalty (i) set forth in Section 3.1 (Organization), Section 3.3 (Authority), Section 3.21 (State Takeover Statutes), and Section 3.24 (Brokers) shall be true and correct in all material respects, (ii) set forth in Section 3.2 (Capital Stock) shall be true and correct in all respects (except for de minimis inaccuracies), and (iii) otherwise set forth in the Merger Agreement shall be true and correct in all respects, except in the case of clause (iii) where the failure would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (in each case, disregarding all materiality and similar qualifiers);

 

•

XOMA Royalty shall have performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Effective Time;

 

•

since the date of the Merger Agreement, there shall not have been any event, change, occurrence or effect that, individually or in the aggregate, has had a Material Adverse Effect that is continuing; and

 

•

Parent shall have received a certificate signed by an executive officer of XOMA Royalty certifying as to the foregoing matters.

 

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Termination of the Merger Agreement

Mutual Termination Rights

The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by mutual written consent of Parent and XOMA Royalty. In addition, either Parent or XOMA Royalty may terminate the Merger Agreement at any time prior to the Effective Time if:

 

•

the Merger shall not have been consummated on or before 11:59 p.m. Eastern Time on January 26, 2027 (provided that this right to terminate will not be available to any party whose breach of the Merger Agreement shall have been the cause of, or resulted in, the failure of the Merger to be consummated by the Termination Date);

 

•

any court of competent jurisdiction or other governmental entity shall have issued any ruling, order, judgment, injunction or decree or taken any other action that enjoins, restrains, prevents, or prohibits the consummation of any of the transactions contemplated by the Merger Agreement and such ruling, order, judgment, injunction, decree or other action shall have become final and nonappealable (provided that the party seeking to terminate shall have used its reasonable best efforts to contest, appeal and remove such order); or

 

•

the Stockholder Approval shall not have been obtained at the Special Meeting duly convened therefor or at any adjournment or postponement thereof at which a vote on the adoption of the Merger Agreement was taken.

Termination by XOMA Royalty

XOMA Royalty may terminate the Merger Agreement at any time prior to the Effective Time if:

 

•

Parent or Merger Sub shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (a) would result in the failure of a closing condition and (b) cannot be cured by the Termination Date or, if capable of being cured, has not been cured by the earlier of two business days prior to the Termination Date or the date that is 30 calendar days following delivery of written notice of such breach or failure to perform (provided that this right to terminate will not be available to XOMA Royalty if it is then in material breach of any of its covenants or agreements set forth in the Merger Agreement); or

 

•

the XOMA Royalty Board authorizes XOMA Royalty, to the extent permitted by and subject to complying with the terms of the Merger Agreement, to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, and concurrently with the termination, XOMA Royalty enters into such Alternative Acquisition Agreement and pays to Parent the termination fee.

Termination by Parent

Parent may terminate the Merger Agreement at any time prior to the Effective Time if:

 

•

XOMA Royalty shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in the Merger Agreement, which breach or failure to perform (a) would result in the failure of a closing condition and (b) cannot be cured by the Termination Date or, if capable of being cured, has not been cured by the earlier of two business days prior to the Termination Date or the date that is 30 calendar days following delivery of written notice of such breach or failure to perform (provided that this right to terminate will not be available to Parent if Parent or Merger Sub is then in material breach of any of its covenants or agreements set forth in the Merger Agreement); or

 

•

the XOMA Royalty Board shall have effected an Adverse Recommendation Change.

 

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Termination Fee

XOMA Royalty will be required to pay a termination fee of $40,000,000 to Parent if the Merger Agreement is terminated:

 

•

by either XOMA Royalty or Parent because the Stockholder Approval is not obtained or the transaction has not closed by the Termination Date, in each case after an Acquisition Proposal has been made or publicly disclosed and not publicly withdrawn, and within 12 months thereafter XOMA Royalty enters into or consummates a qualifying Acquisition Proposal (provided that for this purpose, the references to “20%” in the definition of “Acquisition Proposal” shall be deemed to be references to “more than 50%”);

 

•

by XOMA Royalty, in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal; or

 

•

by Parent, following an Adverse Recommendation Change by the XOMA Royalty Board.

In the event that Parent or its designee shall receive full payment of the termination fee, such receipt shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by Parent, Merger Sub, any of their respective affiliates or any other person in connection with the Merger Agreement, and none of Parent, Merger Sub, any of their respective affiliates or any other person shall be entitled to bring or maintain any claim, action or proceeding against XOMA Royalty or any of its affiliates arising out of or in connection with the Merger Agreement. For the avoidance of doubt, under no circumstances shall Parent be permitted or entitled to receive both a grant of specific performance that results in the closing, on the one hand, and the payment of the termination fee, on the other hand.

Amendment

The Merger Agreement may be amended, modified or supplemented by the parties, prior to the Effective Time and whether before or after XOMA Royalty stockholder approval has been obtained, by action taken or authorized by their respective boards of directors; provided, however, that after XOMA Royalty stockholder approval has been obtained, no amendment may be made that pursuant to applicable law requires further approval or adoption by the stockholders of XOMA Royalty without such further approval or adoption. The Merger Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment thereto, signed on behalf of each of the parties in interest at the time of the amendment.

Extension of Time; Waiver

At any time prior to the Effective Time, the parties may, by action taken or authorized by their respective boards of directors, to the extent permitted by applicable law, (a) extend the time for the performance of any of the obligations or acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other parties set forth in the Merger Agreement or any document delivered pursuant thereto or (c) waive compliance with any of the agreements or conditions of the other parties contained in the Merger Agreement; provided, however, that after the XOMA Royalty stockholder approval has been obtained, no waiver may be made that pursuant to applicable law requires further approval or adoption by the stockholders of XOMA Royalty without such further approval or adoption. Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party. No failure or delay of any party in exercising any right or remedy under the Merger Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power.

Specific Performance

The parties agree that irreparable damage would occur in the event that any of the provisions of the Merger Agreement were not performed in accordance with their specific terms or were otherwise breached and that money damages or other legal remedies would not be an adequate remedy for any such nonperformance or

 

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breach. Accordingly, each of XOMA Royalty (on behalf of itself and on behalf of the holders of shares as third party beneficiaries), Parent and Merger Sub shall be entitled to specific performance of the terms of the Merger Agreement, including an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement, this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

Governing Law; Jurisdiction

The Merger Agreement and any claims or causes of action arising out of or relating to the Merger Agreement shall be governed by, and interpreted, construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws rules or provisions that would result in the application of the laws of any jurisdiction other than the State of Delaware, except that the provisions of the laws of the State of Nevada shall govern (i) the fiduciary duties of the board of directors or officers of XOMA Royalty and Merger Sub, and (ii) to the extent the laws of the State of Nevada are mandatorily applicable to the Merger Agreement, the Merger and the other transactions contemplated thereby.

Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to the Merger Agreement brought by any party or its affiliates against any other party or its affiliates shall be brought and determined in the Eighth Judicial District Court of the State of Nevada in Clark County, Nevada; provided, that if jurisdiction is not then available in such court, then any such legal action or proceeding may be brought in any federal court located in the State of Nevada or any other Nevada state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts and irrevocably waives any right to trial by jury in any action or proceeding arising out of or relating to the Merger Agreement.

 

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CONTINGENT VALUE RIGHTS

The following summary describes the material terms of the CVRs and the CVR Agreement. It does not purport to be a complete description and is qualified in its entirety by reference to the form of CVR Agreement, a copy of which is attached as Annex E to this proxy statement/prospectus and incorporated herein by reference. XOMA Royalty stockholders are urged to read the CVR Agreement in its entirety.

General

If the Merger is completed, each share of XOMA Royalty common stock outstanding immediately prior to the Effective Time (other than Excluded Shares and Dissenting Shares) will be converted, automatically and without any action on the part of the holder, into the right to receive (i) $39.00 in cash, without interest and subject to applicable withholding taxes (the “Closing Amount”), plus (ii) one CVR (collectively with the Closing Amount, the “Merger Consideration”). CVRs also will be issued in respect of certain Company equity awards and Company Warrants as described in the section titled “The Merger Agreement—Treatment of Company Equity Awards and Company Warrants” in this proxy statement/prospectus.

Each CVR represents the right to receive contingent cash payments, if any, derived from the net proceeds of the Janssen Litigation, which payments, if any, will be made by the CVR Trust out of distributions, if any, made by XOMA Royalty LLC. The right to receive any payment in respect of the CVRs is contingent upon, among other things, XOMA Royalty LLC obtaining a recovery in the Janssen Litigation and XOMA Royalty LLC having amounts available for payment to CVR holders after payment or reservation for litigation expenses and other permitted deductions.

The value of the CVRs is inherently and substantially uncertain. The CVRs may have no value, and you may receive no payment in respect of your CVRs. XOMA Royalty stockholders are urged not to attribute any specific value to the CVRs when evaluating whether to vote in favor of the Merger Agreement Proposal. As described below under “—Value of the CVRs is Inherently Uncertain,” XOMA Royalty has prepared an estimate of the value of the Janssen Litigation solely for U.S. federal and other applicable income tax purposes for reporting HoldCo’s corporate taxable gain on the payment of the CVRs. That estimate is not, and should not be relied upon as, an estimate of value for purposes of evaluating the Merger Consideration or as a prediction of any amounts that may be paid on the CVRs.

In connection with the Merger and in furtherance of issuing the CVRs at the Effective Time, XOMA Royalty will undertake the Holding Company Reorganization. Following the Holding Company Reorganization, XOMA Royalty Corporation will convert from a Nevada corporation into a Delaware limited liability company named XOMA Royalty LLC, which will have a single class of equity interests comprising 100 “CLAIM” (Compensation for Licensed Antibody IP Misappropriation) Units. After XOMA Royalty LLC distributes all assets and liabilities unrelated to the Janssen Litigation to HoldCo, HoldCo will contribute 75 CLAIM Units to a newly formed Delaware statutory liquidating trust (the “CVR Trust”) formed for the purpose of holding these CLAIM Units and administering the payment mechanics under the CVR Agreement for any distributions from XOMA Royalty LLC in respect of any proceeds from the Janssen Litigation. The remaining 25 CLAIM Units will be retained by HoldCo, which will become a wholly owned subsidiary of Parent at the Effective Time. Wilmington Trust, National Association will serve as trustee of the CVR Trust (the “Trustee”) and as initial rights agent under the CVR Agreement (the “Rights Agent”).

XOMA Royalty LLC will continue to own and control the Janssen Litigation after the Effective Time. The XOMA Royalty LLC board of directors will have exclusive authority over: (i) the prosecution, defense, settlement, license, assignment, abandonment, dismissal, release or other resolution of the Janssen Litigation; (ii) the selection, retention, replacement or compensation of litigation counsel or experts retained by XOMA Royalty LLC; (iii) the conduct of any phase of the Janssen Litigation, including pleadings, discovery, motions, trial, appeal, post-judgment proceedings, or any settlement discussions or negotiations; (iv) the timing, structure

 

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or terms of any monetization of the Janssen Litigation by XOMA Royalty LLC; or (v) any other matter relating to the conduct or resolution of the Janssen Litigation.

The XOMA Royalty LLC board of directors will determine, in its sole discretion, whether, when and in what amount XOMA Royalty LLC makes any distributions in respect of the CLAIM Units, which would flow through the CVR Trust to the CVR holders under the CVR Agreement. Prior to such distribution, all reasonable and documented out-of-pocket costs and financing costs incurred in the prosecution, defense, enforcement, collection, monetization or resolution of the Janssen Litigation and taxes, if any, imposed on XOMA Royalty, which will be deducted from the distributions to the CVR Trust and HoldCo. If XOMA Royalty LLC makes any such distribution, the distribution must be made pari passu and pro rata among all CLAIM Units, with 75% of the distribution paid to the CVR Trust and 25% paid to HoldCo.

If a distribution is made with respect to the CLAIM Units, the CVR Trust will apply any distribution it receives first to pay or reserve for then-due and reasonably anticipated trust expenses and other amounts permitted to be retained or applied. The balance, if any, will be transferred to the Rights Agent for further payment to CVR holders pro rata in accordance with their respective CVR holdings.

CVR holders will not have any direct claim against XOMA Royalty LLC, HoldCo, Parent or any of their respective affiliates for payments on the CVRs. Following the CVR Payment, the CVR Trust will be the sole obligor with respect to payments on the CVRs, and CVR holders will have recourse solely to the trust assets.

Value of the CVRs is Inherently Uncertain

The value of the CVRs is inherently uncertain and cannot be determined with precision at the date of this proxy statement/prospectus or at the Effective Time. The CVRs represent contractual rights to contingent payments that depend on the outcome, timing and economics of complex commercial litigation that remains subject to substantial uncertainty. Whether any payment will be made on the CVRs, the amount of any such payment, and the timing of any such payment depend on a series of contingencies that are outside the control of HoldCo, Parent and the CVR holders, including: (i) whether XOMA Royalty LLC prevails on the merits of the Janssen Litigation, in whole or in part, whether through settlement, judgment or otherwise; (ii) whether Janssen’s affirmative defenses are successful in defeating XOMA Royalty LLC’s claims in whole or in part; (iii) the amount of any damages awarded, including following discovery and expert testimony that has not yet occurred; (iv) the timing of any recovery, including following discovery, summary judgment proceedings, trial and any appeals; and (v) the amount of litigation expenses, funding obligations, taxes, Trust Expenses and reserves that reduce the amounts, if any, available for payment to CVR holders.

Neither XOMA Royalty nor Parent has obtained, or intends to obtain, an appraisal, fairness opinion or other third-party valuation of the CVRs, and the financial advisor to the XOMA Royalty Board, Leerink Partners, did not opine on, and did not perform any specific valuation of, the CVRs in connection with its fairness opinion delivered to the XOMA Royalty Board. Except for the estimate described below for purposes of reporting our corporate taxable gain on the payment of the CVRs, no value has been assigned to the CVRs in the Merger Agreement or the operative documents governing the CVRs.

Solely for U.S. federal and other applicable income tax purposes arising from reporting the corporate taxable gain on the payment of the CVRs, HoldCo expects to use an estimated value of approximately $50 million for the Janssen Litigation claim as a whole, and therefore approximately $37.5 million for the 75 CLAIM Units that are reflected by the CVRs paid to the CVR holders in the CVR Payment. Based on the maximum aggregate number of CVRs that may be issued under the Merger Agreement, this would correspond to an implied value of approximately $1.84 per CVR (on a fully diluted basis). The final implied per-CVR amount for this estimate may differ based on the actual number of CVRs issued at closing and any adjustments made in connection with final tax reporting.

 

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This estimate is not, and should not be understood as, an estimate of the amount that XOMA Royalty LLC expects to recover in the Janssen Litigation, an estimate of damages, a settlement demand, a settlement range, a litigation position, an admission by XOMA Royalty LLC, or a prediction that any CVR payment will be made. The estimate was prepared solely for non-litigation purposes and was based on generalized and inherently judgmental assumptions, including assumptions regarding average success rates for litigation at a similar procedural stage, publicly available information regarding royalty rates in licensing contexts, the potential time required to resolve the litigation, and discount rates intended to reflect litigation, timing and collection uncertainty. The estimate does not disclose, and is not intended to reflect, XOMA Royalty LLC’s litigation strategy, any expert damages analysis, any privileged or work-product material, or any assessment of the amount that a court or factfinder may award or that Janssen may pay in any settlement.

Nothing in the estimate or the disclosure of the estimate in this proxy statement/prospectus is intended to constitute, and the estimate and its disclosure should not be construed as, an admission against interest, a statement on the merits of the Janssen Litigation, a position taken by XOMA Royalty in the Janssen Litigation, or a waiver of the attorney-client privilege, the attorney work-product doctrine or any other privilege or protection available to XOMA Royalty, XOMA Royalty LLC or any of their respective affiliates in respect of the Janssen Litigation or otherwise. The disclosure of the estimate is made solely for the purpose of providing directional information to XOMA Royalty stockholders and to comply with applicable U.S. federal securities laws.

The actual value of the CVRs could be zero, could be materially less than the estimate described above, or could be materially greater than that estimate. The Janssen Litigation may produce no recovery, any recovery may be delayed for many years, any gross recovery may be reduced or eliminated by litigation expenses, funding obligations, taxes, Trust Expenses and reserves, and the board of directors of XOMA Royalty LLC will have discretion over whether and when to make distributions in respect of the CLAIM Units. Accordingly, stockholders should not treat the estimate described above as a minimum value, expected value, market value, settlement value or expected payment amount for the CVRs, and should continue to evaluate the Merger Consideration primarily on the basis of the $39.00 per share Closing Amount.

There can be no assurance that the CVRs will have any value, and the CVRs may expire with no value. The reasons the CVRs may have no value include, but are not limited to: (i) XOMA Royalty LLC may not prevail in the Janssen Litigation, whether through dismissal at the summary judgment stage, an adverse judgment at trial, an adverse appellate ruling, settlement for no or nominal consideration, abandonment or otherwise; (ii) Janssen’s affirmative defenses may be successful in defeating XOMA Royalty LLC’s claims in whole or in part; (iii) any recovery may be substantially less than the amount of XOMA Royalty LLC’s claims, including following damages reductions, offsets or other limitations imposed by the court or agreed to in settlement; (iv) any gross recovery may be substantially reduced or fully absorbed by attorneys’ fees, expert fees, court costs, litigation funding obligations, taxes, Trust Expenses and reserves; (v) XOMA Royalty LLC may receive non-cash consideration that is difficult to value, monetize or distribute; and (vi) the multi-year time horizon for the Janssen Litigation may, when combined with the time value of money, render any eventual recovery substantially less valuable to CVR holders in present-value terms.

Characteristics of the CVRs

The CVRs are contractual rights only. The CVRs will not be evidenced by any certificate or other instrument, are not expected to be registered under the Securities Act, the Exchange Act or any state securities laws, and will not be listed for trading on any securities exchange or other trading market. Neither the CVR Trust nor the CVRs are expected to be subject to Exchange Act reporting, unless required by applicable law or by the SEC or its staff, and CVR holders should not expect periodic public reports regarding the CVRs, the CVR Trust or XOMA Royalty LLC.

The CVRs will not be transferable, except in limited circumstances permitted by the CVR Agreement. These permitted transfers include certain transfers by will or intestacy, transfers to or by certain trusts, transfers pursuant to court order, transfers by operation of law, certain pro rata distributions by entity holders to their

 

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equity holders or beneficial owners, certain charitable gifts, certain nominee, broker, custodian or similar intermediary transfers on behalf of the same beneficial owner, transfers to the CVR Trust or HoldCo, and subsequent transfers by permitted transferees that themselves qualify as permitted transfers.

The CVR Agreement may be amended in certain circumstances without the consent of any CVR holder or Acting Holder to account for (i) replacement of the Rights Agent or the CVR Trust, (ii) add additional covenants for the protection or benefit of the CVR holders, (iii) made any corrections or cure ambiguity so long as such amendments do not adversely affect the interests of CVR holders, (iv) preserve the intended securities-law, Exchange Act, tax or regulatory treatment of the CVRs, including by restricting, suspending, conditioning, narrowing or eliminating one or more categories of otherwise permitted transfers, imposing additional certification, opinion, information or documentation requirements for permitted transfers, limiting the number or type of holders or beneficial owners, or modifying the procedures for registration of transfers or (v) any other amendment that does not affect the legal rights of CVR holders under the CVR Agreement. Accordingly, the limited transfer rights described above may be narrowed or made more burdensome after the CVRs are issued.

A holder may voluntarily abandon all of its remaining rights represented by CVRs by transferring such CVRs to the CVR Trust without consideration in accordance with the CVR Agreement. If a holder voluntarily abandons its CVRs, those CVRs and all rights represented thereby will be irrevocably cancelled for all purposes, including U.S. federal income tax purposes. By contrast, failure to claim or cash a payment, including the delivery of any unclaimed amount to a governmental authority pursuant to abandoned property, escheat or similar law, will not by itself constitute abandonment or cancellation of the related CVRs, and those CVRs will remain outstanding unless and until voluntarily abandoned and cancelled in accordance with the CVR Agreement.

The CVRs will not have any voting or dividend rights and will not represent any equity, ownership or other interest in HoldCo, Parent, XOMA Royalty LLC, the CVR Trust or any of their respective affiliates. CVR holders will have no rights as stockholders, members, beneficiaries or other equity holders by virtue of holding CVRs, including no right to receive financial statements or other reports except as expressly provided in the CVR Agreement, no right to inspect books and records, no right to receive notice of meetings, no right to attend or participate in meetings, no right to vote on any matter, no right to direct or participate in the management of any of the foregoing entities, and no right to dividends or other distributions other than the contingent rights to payment expressly set forth in the CVR Agreement. Solely for U.S. federal and applicable state and local income tax purposes, (a) the CVRs shall be treated as trust interests in the CVR Trust, (b) the CVR Trust shall be treated as a grantor trust and a disregarded entity, (c) the CVR Trust shall be treated as a widely held fixed investment trust within the meaning of Treasury Regulations Section 1.671-5, (d) the CVR Trust is a passive holder of the CLAIM Units that receives and passes through to the CVR holders all distributions made by XOMA Royalty LLC in respect of the CLAIM Units, with no objective on the part of the CVR Trust to engage in the conduct of a trade or business, and (e) no person other than the CVR holders shall be treated as owning any trust interests in the CVR Trust; this intended tax treatment does not give CVR holders any non-tax ownership, voting, governance, inspection, fiduciary-duty or member rights in XOMA Royalty LLC or the CVR Trust.

As a consequence of this intended tax treatment and the grantor trust rules, a CVR holder will be treated for U.S. federal and applicable state and local income tax purposes as the owner of a pro rata share of the CVR Trust’s assets and will be treated as receiving any amounts received by the CVR Trust when those amounts are received by the CVR Trust (and as making any payments of expenses when the CVR Trust makes those payments). Accordingly, a CVR Holder may be required to take into account in computing its U.S. federal or other applicable taxable income, a share of items of income, gain, loss, deduction and credit of the CVR Trust and, indirectly, of XOMA Royalty LLC for each taxable year, regardless of whether any cash distribution is made to CVR holders in that year. CVR holders may therefore incur U.S. federal income tax liability without receiving any corresponding cash distribution and may be required to provide tax forms, certifications or other information in connection with tax reporting and withholding. For a more detailed discussion, see the section titled “U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus.

 

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No contractual interest will accrue or be payable in respect of any amounts that become payable on the CVRs. However, a portion of any future payment may be treated as imputed interest for U.S. federal income tax purposes, as described under the section titled “U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus.

The Janssen Litigation

The “Janssen Litigation” refers to the action captioned XOMA (US) LLC and XOMA Royalty Corporation v. Janssen Biotech, Inc. and Johnson & Johnson Innovative Medicine, Case No. 2:25-CV-04484-JHS, pending in the United States District Court for the Eastern District of Pennsylvania, and any related claims, counterclaims, demands, proceedings, settlements and rights of recovery arising out of or relating to the same dispute. The action was filed on August 8, 2025.

XOMA Royalty’s claims arise from a series of license agreements among XOMA Royalty, MorphoSys AG (acquired by Novartis in 2024) and Janssen Biotech, Inc. relating to XOMA Royalty’s patented Bacterial Cell Expression Technology (“BCE Technology”). In substance, XOMA Royalty alleges that Janssen used XOMA Royalty’s BCE Technology in the discovery and development of the pharmaceutical product Tremfya^® (guselkumab) but never sought or obtained the required commercial license from XOMA Royalty and has never paid XOMA Royalty any royalties in connection with the sale of Tremfya^®. The complaint asserts breach of contract against Janssen and, in the alternative, unjust enrichment.

On September 10, 2025, Janssen filed a motion to dismiss the complaint on the grounds of (i) lack of standing, (ii) lack of subject matter jurisdiction and (iii) failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). XOMA Royalty filed its opposition on October 1, 2025, and Janssen filed its reply on October 8, 2025. On November 10, 2025, the court granted Janssen’s motion to stay discovery. As of the date of this proxy statement/prospectus, the parties had not yet exchanged documents, taken depositions or obtained expert reports. On December 30, 2025, the court denied Janssen’s motion to dismiss in its entirety. The court’s denial of the motion to dismiss does not constitute a determination that XOMA Royalty LLC will prevail on the merits or recover any amount.

Janssen has asserted several affirmative defenses that the court did not adjudicate at the motion to dismiss stage and remain pending. Janssen has also disputed XOMA Royalty’s interpretation of the relevant contracts, and the resolution of disputed contractual interpretations may depend on factual development through discovery, expert testimony and trial. XOMA Royalty LLC may be unable to prove liability or damages, even if the case proceeds beyond discovery and summary judgment.

Litigation of this complexity may take many years to resolve, and CVR holders may not receive any payment in respect of their CVRs for an extended period of time, if at all. XOMA Royalty has not assigned, and does not intend to assign, the Janssen Litigation to any other person in connection with the Merger or the Holding Company Reorganization. Following the conversion of XOMA Royalty from a Nevada corporation into XOMA Royalty LLC, XOMA Royalty LLC will continue to be the plaintiff in the Janssen Litigation, and XOMA Royalty LLC will retain sole and exclusive control over the prosecution, defense, settlement, monetization and other resolution of the Janssen Litigation.

Governance of the Janssen Litigation

XOMA Royalty LLC will be governed by a board of directors that will be responsible for managing the business and affairs of XOMA Royalty LLC, including the prosecution, defense, settlement, monetization and resolution of the Janssen Litigation. The initial board of directors of XOMA Royalty LLC is expected to consist primarily of individuals serving as directors of XOMA Royalty Corporation immediately prior to the Effective Time.

 

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CVR holders will have no consent, approval, direction, veto, consultation or other right with respect to the prosecution, defense, settlement, monetization, abandonment, dismissal, appeal, enforcement or other resolution of the Janssen Litigation, the selection or replacement of litigation counsel or experts, the timing or amount of any distributions by XOMA Royalty LLC, the establishment or release of reserves, any litigation funding arrangements, or any other matter relating to the business and affairs of XOMA Royalty LLC or the CVR Trust. All decisions regarding the Janssen Litigation will be made exclusively by the XOMA Royalty LLC board of directors in its sole and exclusive discretion.

The Trustee of the CVR Trust, as holder of 75% of the CLAIM Units, will vote the CLAIM Units solely in connection with the election of directors of XOMA Royalty LLC. The Trustee will exercise that limited voting right in the Trustee’s discretion and will not be directed by, nor be obligated to seek direction from, any CVR holder, the Rights Agent, XOMA Royalty LLC or any other person. CVR holders will have no right to vote on, consent to or otherwise direct the actions of the Trustee or the CVR Trust.

Payment of CVR Consideration

Any payments on the CVRs will be made by the Rights Agent to CVR holders out of amounts distributed by the CVR Trust to the Rights Agent for that purpose. XOMA Royalty LLC is not required to make any distribution merely because it has received proceeds or other consideration in connection with the Janssen Litigation. The XOMA Royalty LLC board of directors will determine, in its sole discretion, whether, when and in what amount XOMA Royalty LLC makes any distributions in respect of the CLAIM Units. CVR holders will have no right to compel XOMA Royalty LLC to make any distributions.

For purposes of the CVRs, “Net Litigation Proceeds” generally means cash proceeds actually received by XOMA Royalty LLC or any successor after the Effective Time from the resolution, enforcement, collection, monetization or other disposition of the Janssen Litigation, including any judgment interest, post-judgment interest, settlement interest and cash proceeds from the monetization of any non-cash consideration received in respect of the Janssen Litigation, less specified post-Effective Time litigation, enforcement, collection, monetization and financing costs and Taxes imposed on XOMA Royalty LLC with respect to those proceeds.

If XOMA Royalty LLC makes a distribution in respect of the CLAIM Units, the distribution must be made pari passu and pro rata among all CLAIM Units in accordance with their respective percentage interests. Accordingly, the CVR Trust would receive 75% of any such distribution, and HoldCo or its successor would receive 25% of any such distribution. Following the CVR Trust’s receipt of any such distribution, the Trustee will first pay or reserve for then-due and reasonably anticipated trust expenses and then distribute any remaining amounts to the Rights Agent for further payment to CVR holders pro rata in accordance with their respective CVR holdings. Payments will be made less applicable withholding taxes.

The CVR Trust will have the limited purpose of holding the Contributed CLAIM Units and receiving and distributing any amounts payable in respect of those CLAIM Units pursuant to the CVR Agreement. The CVR Trust will not engage in any trade or business, will not own any assets other than the Contributed CLAIM Units and cash held for distribution to CVR holders, and will not make any investment of trust assets. The Trustee generally acts on written directions or certificates and has no duty to investigate, verify or recalculate litigation proceeds, reserves, withholding or other amounts. The Rights Agent will maintain the CVR Register, process permitted transfers in accordance with the CVR Agreement, and make payments based on Manager certificates and payment reports.

The CVR Agreement provides that the CVR Trust, and not HoldCo, Parent, XOMA Royalty LLC or any of their respective affiliates, will be the sole obligor with respect to payments on the CVRs. Additionally, no creditor of HoldCo or its affiliates will have any claim, lien, security interest or other recourse against the trust assets, the CLAIM Units contributed to the CVR Trust, the proceeds arising therefrom, or the rights of CVR holders by reason of any obligation of HoldCo or its affiliates. The CVR Agreement permits the Rights Agent,

 

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acting at the written direction of the Manager and as representative of the CVR holders, to file one or more UCC financing statements identifying HoldCo as debtor or seller and the Rights Agent as secured party or buyer, solely with respect to the right to receive payment from the CVR Trust. Any such filing is intended as a backstop notice/perfection measure regarding the transfer of the right to receive payment from the CVR Trust and is not intended to create secured indebtedness of HoldCo, the CVR Trust or XOMA Royalty LLC or any lien on the CLAIM Units, the Janssen Litigation or other assets of XOMA Royalty LLC. The effectiveness, priority and consequences of any such filing would be determined under applicable law.

Action by Acting Holder(s); Enforcement

Under the CVR Agreement, the “Acting Holder” means, at the relevant time, the registered holder or holders of more than 40% of the total number of CVRs then registered on the CVR Register. Except for an individual holder’s right to enforce such holder’s right to receive CVR Consideration after such CVR Consideration has become due and payable to that holder, the rights of CVR holders under the CVR Agreement generally may be enforced only by the Acting Holder(s) on behalf of all CVR holders. Individual CVR holders generally will not have the right to bring an action or proceeding to enforce the CVR Agreement.

The Acting Holder(s) may consent to certain amendments to the CVR Agreement and such consent may bind all CVR holders, including holders who do not agree with the action taken or not taken by the Acting Holder(s). The Acting Holder threshold may be difficult for holders to satisfy, and the interests or decisions of the Acting Holder(s) may not reflect the preferences of all CVR holders.

The Acting Holder(s) have no right to direct, approve, consent to, veto or participate in any matter relating to the Janssen Litigation, the timing or amount of distributions by XOMA Royalty LLC, litigation funding, reserves, settlement, abandonment, appeal, monetization or any other business or affairs of XOMA Royalty LLC.

Amendments to the CVR Agreement

The CVR Agreement may be amended in accordance with its terms. Certain amendments may be made without the consent of any CVR holder or Acting Holder, including amendments to evidence the appointment of a successor Rights Agent, to evidence succession to the CVR Trust, to add covenants or restrictions for the protection or benefit of CVR holders, to cure ambiguities or correct defects or inconsistencies that do not adversely affect the interests of CVR holders, and to make other amendments that do not adversely affect the legal rights of CVR holders under the CVR Agreement.

In addition, the CVR Agreement may be amended without the consent of any CVR holder or Acting Holder to ensure, preserve or support the position that the CVRs or the direct contractual rights against the CVR Trust represented by the CVRs are not subject to registration under the Securities Act or the Exchange Act, including Section 12(g) of the Exchange Act, or to conform the CVR Agreement to the terms and conditions of any no-action relief, exemptive relief, comment, request, position, guidance or other communication from the staff of the SEC or any other governmental authority. The CVR Agreement may also be amended without CVR holder or Acting Holder consent to ensure that the CVR Trust, HoldCo, XOMA Royalty LLC, Parent, the Rights Agent or any of their respective affiliates complies with applicable law, does not become subject to an Exchange Act registration or reporting requirement, or preserves the Intended Tax Treatment. These amendments may restrict, suspend, condition, narrow or eliminate categories of permitted transfers, impose additional certification, opinion, information or documentation requirements for permitted transfers, limit the number or type of holders or beneficial owners, or modify procedures for registration of transfers.

Without the consent of each affected holder, amendments to the CVR Agreement may not reduce any CVR Consideration that has become due and payable to such holder before the effectiveness of the amendment or alter such holder’s pro rata share of any amount already received by the Rights Agent for payment to such holder, except to the extent required by applicable law. However, amendments made without holder consent may reduce

 

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flexibility, impose additional procedural requirements or otherwise change how the CVRs are administered.

Term and Termination

The CVRs will remain outstanding until the CVR Agreement terminates in accordance with its terms. The CVR Agreement will terminate on the date on which the Manager certifies to the Rights Agent that: (i) final resolution of the Janssen Litigation has occurred; (ii) the CVR Trust has received all distributions, if any, payable to it in respect of the Contributed CLAIM Units; (iii) all amounts actually received by the CVR Trust and payable to CVR holders under the CVR Agreement have been distributed to the Rights Agent, retained as permitted reserves, cancelled following voluntary abandonment or delivered to the applicable governmental authority under abandoned property, escheat or similar law; and (iv) no further proceeds could become payable under the CVR Agreement. The CVR Agreement will remain in effect with respect to any future, deferred, contingent or installment payments payable to, or actually received by, the CVR Trust in respect of the Contributed CLAIM Units. Termination of the CVR Agreement will not affect or limit the right of CVR holders to receive any CVR Consideration that became due and payable before termination.

 

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THE HOLDING COMPANY REORGANIZATION

The following is a description of material aspects of the Holding Company Reorganization. While XOMA Royalty believes that the following description covers the material terms of the Holding Company Reorganization, the description may not contain all of the information that is important to you. You are encouraged to read carefully this entire proxy statement/prospectus, including the text of the HoldCo Reorganization Merger Agreement attached to this proxy statement/prospectus as Annex B, for a more complete understanding of the Holding Company Reorganization.

Overview

The Holding Company Reorganization is a reorganization pursuant to NRS Chapter 92A under which XOMA Royalty Holdings Corporation, a Nevada corporation and a newly formed, direct, wholly owned subsidiary of XOMA Royalty (“HoldCo”), will become the holding company of XOMA Royalty. The Holding Company Reorganization is intended to occur prior to the Effective Time contemplated by the Merger Agreement, and is subject to approval of the Holding Company Reorganization Proposal and the satisfaction (or waiver, to the extent permitted) of the conditions summarized below and described in the HoldCo Reorganization Merger Agreement.

Structure of the Holding Company Reorganization

Pursuant to the HoldCo Reorganization Merger Agreement, a direct, wholly owned subsidiary of HoldCo will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo, and HoldCo becoming the holding company of XOMA Royalty. The sequence and timing of the steps are designed to align with the Merger Agreement so that, following consummation of the Holding Company Reorganization and at the Effective Time, Merger Sub will merge with and into HoldCo, with HoldCo surviving as a wholly owned subsidiary of Parent.

Effectiveness of the Holding Company Reoganization

At the effectiveness of the Holding Company Reorganization:

 

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each share of XOMA Royalty common stock outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of common stock of HoldCo, having the same rights, powers and preferences as such share of XOMA Royalty common stock;

 

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each share of Company Preferred Stock outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of preferred stock of HoldCo, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as such share of Company Preferred Stock; and

 

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each Company equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to shares of HoldCo common stock (or, as applicable, HoldCo preferred stock), in each case on the same terms and conditions (including vesting, exercise, settlement and other material provisions) as in effect immediately prior to such effectiveness.

Governance Following the Holding Company Reorganization

The articles of incorporation and bylaws of HoldCo will be, immediately following the Holding Company Reorganization, substantially identical in all material respects to the existing articles of incorporation and bylaws of XOMA Royalty, except for changes necessary or appropriate to reflect the holding company structure and matters incidental thereto. For a more detailed description of the rights of HoldCo stockholders, and the material

 

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